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8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): July 26, 2016

BOSTON PROPERTIES, INC.

BOSTON PROPERTIES LIMITED PARTNERSHIP

(Exact Name of Registrants As Specified in its Charter)


Boston Properties, Inc.	Delaware	1-13087	04-2473675
	(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

Boston Properties Limited Partnership	Delaware	0-50209	04-3372948
	(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

800 Boylston Street, Suite 1900, Boston, Massachusetts 02199

(Address of Principal Executive Offices) (Zip Code)

(617) 236-3300

(Registrants’ telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrants under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

The information in this Item 2.02 - “Results of Operations and Financial Condition” is being furnished. Such information, including Exhibits 99.1 and 99.2 hereto, shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in this Item 2.02, including Exhibits 99.1 and 99.2, shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing.

On July 26, 2016, Boston Properties, Inc. (the “Company”), the general partner of Boston Properties Limited Partnership, issued a press release announcing its financial results for the second quarter of 2016. That press release referred to certain supplemental information that is available on the Company’s website. The text of the supplemental information and the press release are attached hereto as Exhibits 99.1 and 99.2, respectively, and are incorporated by reference herein.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.


Exhibit No.		Description

*99.1		Boston Properties, Inc. Supplemental Operating and Financial Data for the quarter ended June 30, 2016.

*99.2		Press release dated July 26, 2016.

*	Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized.


	BOSTON PROPERTIES, INC.

	By:	/s/ Michael E. LaBelle
		Michael E. LaBelle
		Executive Vice President, Chief Financial Officer
		and Treasurer

	BOSTON PROPERTIES LIMITED PARTNERSHIP
	By:	Boston Properties, Inc., its General Partner

	By:	/s/ Michael E. LaBelle
		Michael E. LaBelle
		Executive Vice President, Chief Financial Officer
		and Treasurer

Date: July 26, 2016

EXHIBIT INDEX


Exhibit No.		Description

*99.1		Boston Properties, Inc. Supplemental Operating and Financial Data for the quarter ended June 30, 2016.

*99.2		Press release dated July 26, 2016.

*	Filed herewith.

EX-99.1

Exhibit 99.1

LOGO

Supplemental Operating and Financial Data

for the Quarter Ended June 30, 2016

LOGO

SECOND QUARTER 2016

Table of Contents


	Page
Company Profile		3
Investor Information		4
Research Coverage		5
Guidance and Assumptions		6
Financial Highlights		7
Consolidated Balance Sheets		8
Consolidated Income Statements		9
Funds From Operations		10
Reconciliation to Diluted Funds From Operations		11
Funds Available for Distribution and Interest Coverage Ratios		12
Capital Structure		13
Debt Analysis		14-16
Unconsolidated Joint Ventures		17-18
Consolidated Joint Ventures		19-20
Portfolio Overview		21
In-Service Property Listing		22-24
Occupancy by Location		25
Top 20 Tenants and Tenant Diversification		26
Lease Expiration Roll Out		27
Boston Lease Expiration Roll Out		28-29
New York Lease Expiration Roll Out		30-31
San Francisco Lease Expiration Roll Out		32-33
Washington, DC Lease Expiration Roll Out		34-35
CBD/Suburban Lease Expiration Roll Out		36-37
Hotel and Residential Performance		38
Same Property Performance		39
Reconciliation to Same Property Performance and Net Income		40-41
Leasing Activity		42
Capital Expenditures, Tenant Improvements and Leasing Commissions		43
Acquisitions/Dispositions		44
Value Creation Pipeline—Construction in Progress		45
Value Creation Pipeline—Land Parcels and Purchase Options		46
Definitions		47-49

This supplemental package contains forward-looking statements within the meaning of the Federal securities laws. You can identify these statements by our use of the words “assumes,” “believes,” “estimates,” “expects,” “guidance,” “intends,” “may,” “might,” “plans,” “projects,” “should,” “will” and similar expressions that do not relate to historical matters. You should exercise caution in interpreting and relying on forward-looking statements because they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond Boston Properties’ control and could materially affect actual results, performance or achievements. These factors include, without limitation, the ability to enter into new leases or renew leases on favorable terms, dependence on tenants’ financial condition, the uncertainties of real estate development, acquisition and disposition activity, the ability to effectively integrate acquisitions, the uncertainties of investing in new markets, the ability of our joint venture partners to satisfy their obligations, the costs and availability of financing, the effectiveness of our interest rate hedging programs, the effects of local, national and international economic and market conditions, the effects of acquisitions, dispositions and possible impairment charges on our operating results, the impact of newly adopted accounting principles on the Company’s accounting policies and on period-to-period comparisons of financial results, regulatory changes and other risks and uncertainties detailed from time to time in the Company’s filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date hereof and are not guarantees of future results, performance or achievements. Boston Properties does not undertake a duty to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

(Cover photo: Rendering of Salesforce Tower, San Francisco, CA)

(Photo credit: Steelblue)

LOGO

SECOND QUARTER 2016

COMPANY PROFILE

The Company

Boston Properties, Inc. (“Boston Properties,” “BXP” or the “Company”), a self-administered and self-managed real estate investment trust (REIT), is one of the largest owners, managers, and developers of first-class office properties in the United States, with a significant presence in five markets: Boston, Los Angeles, New York, San Francisco, and Washington, DC. The Company was founded in 1970 by Mortimer B. Zuckerman and Edward H. Linde in Boston, where it maintains its headquarters. Boston Properties became a public company in June 1997. The Company acquires, develops and manages its properties through full-service regional offices. Its property portfolio is comprised primarily of Class A office properties, five retail properties, four residential properties (including two properties under construction) and one hotel. Boston Properties is well-known for its in-house building management expertise and responsiveness to tenants’ needs. The Company holds a superior track record in developing premium Central Business District (CBD) office buildings, successful mixed-use complexes, suburban office centers and build-to-suit projects for the U.S. government and a diverse array of creditworthy tenants.

Management

Boston Properties’ senior management team is among the most respected and accomplished in the REIT industry. Our deep and talented team of 35 individuals averages 30 years of real estate experience and 19 years with Boston Properties. We believe that our size, management depth, financial strength, reputation, and relationships of key personnel provide a competitive advantage to realize growth through property development and acquisitions. Boston Properties benefits from the reputation and relationships of key personnel, including Owen D. Thomas, Chief Executive Officer; Douglas T. Linde, President; Raymond A. Ritchey, Senior Executive Vice President; and Michael E. LaBelle, Executive Vice President, Chief Financial Officer and Treasurer. Our senior management team’s national reputation helps us attract business and investment opportunities. In addition, our other executive officers that serve as Regional Managers have strong reputations that assist in identifying and closing on new opportunities, having opportunities brought to us, and in negotiating with tenants and build-to-suit prospects. Additionally, Boston Properties’ Board of Directors consists of 11 distinguished members, the majority of whom are Independent Directors.

Strategy

Boston Properties’ primary business objective is to maximize return on investment in an effort to provide its investors with the greatest possible total return in all points of the economic cycle. To achieve this objective, the Company maintains consistent strategies that include the following:

•

concentrating on carefully targeted markets characterized by high barriers to the creation of new supply and strong real estate fundamentals where tenants have demonstrated a preference for high-quality office buildings and other facilities—currently Boston, Los Angeles, New York, San Francisco and Washington, DC;

•

investing in the highest quality buildings (primarily office) that are able to maintain high occupancy and achieve premium rental rates through economic cycles;

•

in our core markets, maintaining scale and a full service real estate capability (leasing, development, construction and property management) to ensure we (1) see all relevant investment deal flow and (2) maintain an ability to execute on all types of real estate opportunities, such as acquisitions, dispositions, repositioning and development, throughout the real estate investment cycle;

•

be astute in market timing for investment decisions by acquiring properties in times of opportunity, developing into economic growth and selectively selling assets to either take advantage of the demand for our premier properties or pare from the portfolio properties that we believe have slower future growth potential, resulting in continuous portfolio refreshment;

•

taking on complex, technically-challenging development projects that leverage the skills of our management team to successfully develop, acquire, and reposition properties;

•

exploring joint-venture opportunities with partners who seek to benefit from our depth of development and management expertise;

•

ensuring a strong balance sheet to maintain consistent access to capital and the resultant ability to make opportunistic investments; and

•

fostering a culture and reputation of integrity and fair dealing, making us the counterparty of choice for tenants and real estate industry participants.

Snapshot

(as of June 30, 2016)


Corporate Headquarters		Boston, Massachusetts
Markets (1)		Boston, Los Angeles, New York, San Francisco and Washington, DC
Fiscal Year-End		December 31
Total Properties (includes unconsolidated joint ventures)		168
Total Square Feet (includes unconsolidated joint ventures)		46.5 million
Common shares outstanding, plus preferred shares and common and LTIP units (including Outperformance Plan Units and 2013 Multi-Year Long-Term Incentive Program (“MYLTIP”) Units when earned) on an as-converted basis (excludes 2014, 2015 and 2016 MYLTIP Units because not yet earned)		171.8 million
Dividend—Quarter/Annualized		$0.65/$2.60
Dividend Yield		1.97%
BXP’s Share of Combined Market Capitalization (2)		$32.0 billion
Senior Debt Ratings		A- (S&P); BBB+ (Fitch); Baa2 (Moody’s)

(1)	On July 1, 2016, the Company acquired a 49.8% interest in an existing joint venture that owns and operates Colorado Center located in Santa Monica, California, which resulted in the Company’s entry into the Los Angeles market.

(2)	For the Company’s definition of BXP’s Share of Combined Market Capitalization and related disclosures, see page 47.

LOGO

SECOND QUARTER 2016

INVESTOR INFORMATION


Board of Directors
Joel I. Klein		Dr. Jacob A. Frenkel
Lead Independent Director		Director, Chair of Nominating & Corporate Governance Committee

Owen D. Thomas Chief Executive Officer and Director		Matthew J. Lustig Director

Douglas T. Linde President and Director		Alan J. Patricof Director

Bruce W. Duncan Director		Martin Turchin Director

Karen E. Dykstra Director		David A. Twardock Director, Chair of Audit Committee

Carol B. Einiger
Director, Chair of Compensation Committee

Chairman Emeritus
Mortimer B. Zuckerman


Management
Raymond A. Ritchey		John F. Powers
Senior Executive Vice President		Executive Vice President, New York Region

Michael E. LaBelle Executive Vice President, Chief Financial Officer and Treasurer		Frank D. Burt Senior Vice President, General Counsel

Peter D. Johnston		Michael R. Walsh
Executive Vice President, Washington, DC Region		Senior Vice President, Chief Accounting Officer

Bryan J. Koop
Executive Vice President, Boston Region

Robert E. Pester
Executive Vice President, San Francisco Region


Company Information
Corporate Headquarters	Trading Symbol	Investor Relations	Inquires
800 Boylston Street Suite 1900 Boston, MA 02199 (t) 617.236.3300 (f) 617.236.3311	BXP	Boston Properties, Inc. 800 Boylston Street, Suite 1900 Boston, MA 02199 (t) 617.236.3322 (f) 617.236.3311 www.bostonproperties.com	Inquiries should be directed to
			Michael E. LaBelle
	Stock Exchange Listing New York Stock Exchange		Executive Vice President, Chief Financial Officer and Treasurer
			at 617.236.3352 or
			mlabelle@bostonproperties.com

			Arista Joyner, Investor Relations Manager
			at 617.236.3343 or
			ajoyner@bostonproperties.com

Common Stock Data (NYSE: BXP)

Boston Properties’ common stock has the following characteristics (based on information reported by the New York Stock Exchange):


	Q2 2016			Q1 2016			Q4 2015			Q3 2015			Q2 2015
High Closing Price	$	133.13		$	127.26		$	130.15		$	126.32		$	142.17
Low Closing Price	$	123.71		$	108.18		$	118.62		$	108.65		$	120.83
Average Closing Price	$	128.38		$	118.69		$	124.47		$	119.54		$	131.76
Closing Price, at the end of the quarter	$	131.90		$	127.08		$	127.54		$	118.40		$	121.04

Dividends per share	$	0.65		$	0.65		$	0.65		$	0.65		$	0.65
Special dividends per share	$	—		$	—		$	1.25		$	—		$	—

Total dividends	$	0.65		$	0.65		$	1.90		$	0.65		$	0.65


Closing dividend yield—annualized		1.97	%		2.05	%		3.02	% (1)		2.20	%		2.15	%
Closing common shares outstanding, plus preferred shares and common and LTIP units (including Outperformance Plan Units and 2013 MYLTIP Units when earned) on an as-converted basis (excludes 2014, 2015 and 2016 MYLTIP Units because not yet earned) (thousands) (2)		171,772			171,763			171,509			171,509			171,506
Closing market value of outstanding shares and units (thousands)	$	22,856,727		$	22,027,642		$	22,074,258		$	20,506,666		$	20,959,086

(1)

Includes the special dividend of $1.25 per share paid on January 28, 2016 to shareholders of record as of the close of business on December 31, 2015.

(2)

For additional detail, see page 13.


Timing
Quarterly results for the next four quarters will be announced according to the following schedule:

Third Quarter, 2016		Tentatively October 25, 2016
Fourth Quarter, 2016		Tentatively January 31, 2017
First Quarter, 2017		Tentatively April 25, 2017
Second Quarter, 2017		Tentatively August 1, 2017

LOGO

SECOND QUARTER 2016

RESEARCH COVERAGE


Equity Research Coverage		Debt Research Coverage	Rating Agencies

Lucy Moore	Jonathan Petersen / Omotayo Okusanya	Scott Frost	Stephen Boyd
Argus Research Company	Jefferies & Co.	Bank of America Merrill Lynch	Fitch Ratings
646.747.5456	212.284.1705 / 212.336.7076	646.855.8078	212.908.9153

Jeffrey Spector / Jamie Feldman	Anthony Paolone	Peter Troisi	Ranjini Venkatesan
Bank of America Merrill Lynch	J.P. Morgan Securities	Barclays	Moody’s Investors Service
646.855.1363 / 646.855.5808	212.622.6682	212.412.3695	212.553.3828

Ross Smotrich / Peter Siciliano	Craig Mailman / Jordan Sadler	Thomas Cook	Anita Ogbara
Barclays Capital	KeyBanc Capital Markets	Citi Investment Research	Standard & Poor’s
212.526.2306 / 212.526.3098	917.368.2316 / 917.368.2280	212.723.1112	212.438.5077

David Toti	Richard Anderson	John Giordano
BB&T Capital Markets	Mizuho Securities	Credit Suisse Securities
212.419.4620	212.205.8445	212.538.4935

John Kim	Sumit Sharma / Vikram Malhotra	Ron Perrotta
BMO Capital	Morgan Stanley	Goldman Sachs
212.885.4115	212.761.7567 / 212.761.7064	212.702.7885

Thomas Lesnick	Mike Carroll	Mark Streeter
Capital One Securities	RBC Capital Markets	J.P. Morgan Securities
571.633.8191	440.715.2649	212.834.5086

Michael Bilerman / Emmanuel Korchman	David Rodgers / Richard Schiller	Thierry Perrein / Jason Jones
Citigroup Global Markets	RW Baird	Wells Fargo
212.816.1383 / 212.816.1382	216.737.7341 / 312.609.5485	704.715.8455 / 704.715.7932

Ian Weissman / Derek van Dijkum	Alexander Goldfarb / Daniel Santos
Credit Suisse	Sandler O’Neill & Partners
212.538.6889 / 212.325.9752	212.466.7937 / 212.466.7927

Barry Oxford	John Guinee / Erin Aslakson
D.A. Davidson & Co.	Stifel, Nicolaus & Company
212.240.9871	443.224.1307 / 443.224.1350

Vincent Chao / Mike Husseini	Michael Lewis
Deutsche Bank Securities	SunTrust Robinson Humphrey
212.250.6799 / 212.250.7703	212.319.5659

Steve Sakwa / Robert Simone	Nick Yulico
Evercore ISI	UBS Securities
212.446.9462 / 212.446.9459	212.713.3402

Brad Burke	Blaine Heck
Goldman Sachs	Wells Fargo Securities
917.343.2082	443.263.6529

Jed Reagan / Tyler Grant
Green Street Advisors
949.640.8780

With the exception of Green Street Advisors, an independent research firm, the equity analysts listed above are those analysts that, according to First Call Corporation, have published research material on the Company and are listed as covering the Company. Please note that any opinions, estimates or forecasts regarding Boston Properties’ performance made by the analysts listed above do not represent the opinions, estimates or forecasts of Boston Properties or its management. Boston Properties does not by its reference above imply its endorsement of or concurrence with any information, conclusions or recommendations made by any of such analysts.

LOGO

SECOND QUARTER 2016

GUIDANCE

The Company’s guidance for the third quarter and full year 2016 for EPS (diluted) and FFO per share (diluted) is set forth and reconciled below. Except as described below, the estimates reflect management’s view of current and future market conditions, including assumptions with respect to rental rates, occupancy levels and the earnings impact of the events referenced in the earnings release issued on July 26, 2016 and otherwise referenced during the Company’s conference call scheduled for July 27, 2016. The estimates do not include possible future gains or losses or the impact on operating results from other possible future property acquisitions or dispositions, other possible capital markets activity or possible future impairment charges. EPS estimates may be subject to fluctuations as a result of several factors, including changes in the recognition of depreciation and amortization expense and any gains or losses associated with disposition activity. The Company is not able to assess at this time the potential impact of these factors on projected EPS. By definition, FFO does not include real estate-related depreciation and amortization, impairment losses or gains or losses associated with disposition activities. There can be no assurance that the Company’s actual results will not differ materially from the estimates set forth below.


	Third Quarter 2016				Full Year 2016
	Low		High		Low		High
Projected Earnings per share (diluted)	$	0.57	$	0.59	$	3.04	$	3.11
Add:
Projected Company share of real estate depreciation and amortization		0.83		0.83		3.27		3.27
Less:
Projected Company share of gains on sales of real estate		—		—		0.39		0.39

Projected FFO per share (diluted)	$	1.40	$	1.42	$	5.92	$	5.99

ASSUMPTIONS

(dollars in thousands)


	Full Year 2016
	Low			High
Operating property activity:
Average In-service portfolio occupancy		90.0	%		91.5	%
Combined Same Property net operating income—GAAP basis (change from 2015) (1)		(0.75	)%		0.75	%
Combined Same Property net operating income—cash basis (change from 2015) (1)		1.00	%		3.00	%
Non Same Properties’ incremental contribution over 2015 (2)	$	46,000		$	52,000
Straight-line rent and fair value lease revenue (non-cash revenue) (2)	$	52,000		$	65,000
Hotel net operating income	$	13,000		$	15,000
Other income (expense):
Development and management services income	$	23,000		$	26,000
General and administrative expense	$	(102,000	)	$	(107,000	)
Net interest expense	$	(400,000	)	$	(415,000	)
Noncontrolling interest:
Noncontrolling interest in property partnerships’ share of FFO	$	(95,000	)	$	(115,000	)

(1)	Excluding the impact of the noncontrolling interest share from the consolidated portfolio, BXP’s Share of Combined Same Property Net Operating Income —GAAP basis and —cash basis is assumed to be 0.25% - 1.75% and 2.00% - 4.00%, respectively.

(2)	Includes BXP’s share of unconsolidated and consolidated joint venture properties.

LOGO

SECOND QUARTER 2016

FINANCIAL HIGHLIGHTS

(unaudited and in thousands, except per share amounts)

This section includes non-GAAP financial measures, which are accompanied by what the Company considers the most directly comparable financial measures calculated and presented in accordance with GAAP. Quantitative reconciliations of the differences between the non-GAAP financial measures presented and the most directly comparable GAAP financial measures are shown on pages 10-12. Descriptions of the non-GAAP financial measures the Company presents and statements of the reasons why management believes the non-GAAP measures provide useful information to investors about the Company’s financial condition and results of operations can be found on pages 47-49.


	Three Months Ended
	30-Jun-16			31-Mar-16			31-Dec-15			30-Sep-15			30-Jun-15
Selected Items:
Revenue	$	623,546		$	665,985		$	624,240		$	629,884		$	618,221
Straight-line rent (1) (2)	$	(5,434	)	$	13,792		$	18,149		$	12,630		$	14,024
Fair value lease revenue (1) (3)	$	5,776		$	5,375		$	4,966		$	5,937		$	6,667
Income from unconsolidated joint ventures	$	2,234		$	1,791		$	2,211		$	2,647		$	3,078
BXP’s share of funds from operations (FFO) from unconsolidated joint ventures	$	6,852	(4)	$	6,287		$	6,205		$	6,455		$	6,964
Lease termination fees (1) (5)	$	7,614		$	49,445		$	5,605		$	7,760		$	5,419
Ground rent expense (6)	$	3,469		$	3,471		$	3,463		$	3,534		$	3,676
Fair value interest adjustment (1)	$	6,732		$	7,810		$	8,593		$	8,062		$	7,856
Capitalized interest	$	9,899		$	9,269		$	8,298		$	9,100		$	8,850
Capitalized wages	$	4,467		$	4,344		$	4,130		$	4,111		$	3,997
Operating margins [(rental revenue—rental expense)/rental revenue] (7)		65.8	%		68.2	%		66.3	%		65.9	%		66.2	%
Losses from early extinguishments of debt	$	—		$	—		$	(22,040	)	$	—		$	—
Income before gains on sales of real estate	$	117,357		$	148,599		$	85,406		$	123,792		$	100,739
Net income attributable to Boston Properties, Inc. common shareholders	$	96,597		$	181,747		$	137,851		$	184,082		$	79,460
Net income attributable to Boston Properties, Inc. per share—basic	$	0.63		$	1.18		$	0.90		$	1.20		$	0.52
Net income attributable to Boston Properties, Inc. per share—diluted	$	0.63		$	1.18		$	0.90		$	1.20		$	0.52
FFO attributable to Boston Properties, Inc.	$	220,595		$	250,688		$	197,339		$	217,261		$	208,731
FFO per share—diluted (8)	$	1.43		$	1.63		$	1.28		$	1.41		$	1.36
Dividends per common share (9)	$	0.65		$	0.65		$	1.90		$	0.65		$	0.65
Funds available for distribution to common shareholders and common unitholders (FAD) (8) (10)	$	160,989		$	188,204		$	138,872		$	142,580		$	148,967
Ratios:
Interest Coverage Ratio (excluding capitalized interest)—cash basis (11)		3.59			3.76			3.25			3.30			3.21
Interest Coverage Ratio (including capitalized interest)—cash basis (11)		3.28			3.46			3.02			3.06			2.98
FFO Payout Ratio (10)		45.45	%		39.88	%		50.78	%		46.10	%		47.79	%
FAD Payout Ratio (10)		69.41	%		59.35	%		80.33	%		78.24	%		74.94	%

	30-Jun-16			31-Mar-16			31-Dec-15			30-Sep-15			30-Jun-15
Balance Sheet Items:
Above-market rents (included within Prepaid Expenses and Other Assets)	$	43,780		$	47,388		$	51,397		$	55,434		$	63,706
Below-market rents (included within Other Liabilities)	$	152,576		$	160,504		$	172,670		$	184,154		$	202,653
Accrued ground rent expense, net (included within Prepaid Expenses and Other Assets and Other Liabilities)	$	40,687		$	39,752		$	38,765		$	42,962		$	41,857
Accrued interest payable on outside members’ notes payable (included within Accrued Interest Payable)	$	136,131		$	127,670		$	119,436		$	111,422		$	103,622
Capitalization:
Common Stock Price @ Quarter End	$	131.90		$	127.08		$	127.54		$	118.40		$	121.04
Equity Value @ Quarter End	$	22,856,727		$	22,027,642		$	22,074,258		$	20,506,666		$	20,959,086
Consolidated Debt	$	9,754,084		$	9,980,366		$	9,008,543		$	9,699,187		$	9,835,878
Consolidated Market Capitalization	$	32,610,811		$	32,008,008		$	31,082,801		$	30,205,853		$	30,794,964
Consolidated Debt/Consolidated Market Capitalization (8)		29.91	%		31.18	%		28.98	%		32.11	%		31.94	%
BXP’s Share of Unconsolidated Joint Venture Debt	$	350,831	(4)	$	351,394		$	351,926		$	351,340		$	351,154
Combined Debt (8)	$	10,104,915		$	10,331,760		$	9,360,469		$	10,050,527		$	10,187,032
Less:
Partners’ Share of Consolidated Debt (12)	$	976,399		$	982,292		$	988,142		$	993,988		$	1,166,726
BXP’s Share of Combined Debt (8)	$	9,128,516		$	9,349,468		$	8,372,327		$	9,056,539		$	9,020,306
BXP’s Share of Combined Market Capitalization (8) (13)	$	31,985,243		$	31,377,110		$	30,446,585		$	29,563,205		$	29,979,392
BXP’s Share of Combined Debt/BXP’s Share of Combined Market Capitalization (8) (13)		28.54	%		29.80	%		27.50	%		30.63	%		30.09	%

(1)	Includes the Company’s share of consolidated and unconsolidated joint ventures amounts.

(2)	During the three months ended June 30, 2016, the Company recognized an aggregate of approximately $15.4 million of lump sum rental income amounts from three tenants that will be straight-lined through each tenant’s lease term. These amounts are in addition to the tenants’ monthly rental payments.

(3)	Represents the net adjustment for above- and below-market leases that are being amortized over the terms of the respective leases in place at the property acquisition dates.

(4)	For additional detail, see pages 17-18.

(5)

For the three months ended March 31, 2016, includes approximately $45.0 million received from a tenant that terminated its lease for approximately 85,000 square feet at the Company’s 250 West 55th Street property located in New York City. For the three months ended June 30, 2016 and September 30, 2015, includes distributions received by the Company from its unsecured creditor claim against Lehman Brothers, Inc. of approximately $1.4 million and $3.6 million, respectively.

(6)	Includes non-cash straight-line adjustments to ground rent. See page 12 for the straight-line adjustments to the ground rent expense.

(7)

Rental expense consists of operating expenses, real estate taxes and ground rent expense. Amounts are exclusive of the gross up of reimbursable electricity and other amounts totaling $16,497, $17,913, $18,102, $18,989 and $17,845 for the three months ended June 30, 2016, March 31, 2016, December 31, 2015, September 30, 2015 and June 30, 2015, respectively.

(8)	For the Company’s definitions and related disclosures, see pages 47-49.

(9)	For the three months ended December 31, 2015, dividends per common share includes the $1.25 per common share special dividend paid on January 28, 2016 to shareholders of record as of the close of business on December 31, 2015.

(10)

FFO Payout Ratio equals dividends per common share (excluding any special dividends) divided by FFO per share-diluted. For a quantitative reconciliation of FFO, see page 10. FAD Payout Ratio equals distributions to common shareholders and unitholders (excluding any special distributions) divided by FAD. For a quantitative reconciliation of FAD, see page 12.

(11)

The Company believes that the presentation of its interest coverage ratios provides investors with useful information about the Company’s financial performance as it relates to its cash interest expense obligations, which may assist investors in evaluating the Company’s ability to service its existing debt obligations. For a quantitative reconciliation, see page 12.

(12)	Amount is calculated based on the outside partners’ percentage ownership interest in the consolidated joint venture entities.

(13)	For additional detail, see page 13.

LOGO

SECOND QUARTER 2016

CONSOLIDATED BALANCE SHEETS

(unaudited and in thousands)


	30-Jun-16			31-Mar-16			31-Dec-15			30-Sep-15			30-Jun-15
ASSETS
Real estate	$	18,690,403		$	18,424,542		$	18,465,405		$	18,412,086		$	18,207,934
Construction in progress (1)		865,359			857,578			763,935			725,601			880,996
Land held for future development		241,106			256,952			252,195			264,598			277,327
Less accumulated depreciation		(4,056,716	)		(3,969,648	)		(3,925,894	)		(3,833,277	)		(3,753,926	)

Total real estate		15,740,152			15,569,424			15,555,641			15,569,008			15,612,331
Cash and cash equivalents		1,180,044			1,605,678			723,718			1,387,007			1,342,751
Cash held in escrows (2)		65,654			71,349			73,790			90,379			252,558
Investments in securities		21,775			21,077			20,380			19,645			20,953
Tenant and other receivables, net		84,861			73,759			97,865			66,446			55,183
Accrued rental income, net		776,816			767,864			754,883			737,145			730,797
Deferred charges, net (3)		697,823			693,976			704,867			719,019			739,838
Prepaid expenses and other assets		144,222			136,799			185,118			143,476			117,993
Investments in unconsolidated joint ventures		252,618			235,904			235,224			217,529			209,974

Total assets	$	18,963,965		$	19,175,830		$	18,351,486		$	18,949,654		$	19,082,378

LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net (3)	$	3,189,013		$	3,416,622		$	3,435,242		$	4,127,007		$	4,264,920
Unsecured senior notes, net (3)		6,257,274			6,255,602			5,264,819			5,263,363			5,261,810
Unsecured line of credit		—			—			—			—			—
Mezzanine notes payable		307,797			308,142			308,482			308,817			309,148
Outside members’ notes payable		180,000			180,000			180,000			180,000			180,000
Accounts payable and accrued expenses		287,464			252,727			274,709			245,200			231,900
Dividends and distributions payable		113,071			113,079			327,320			112,912			112,892
Accrued interest payable		222,175			221,578			190,386			200,916			178,548
Other liabilities		508,952			498,290			483,601			448,680			448,480

Total liabilities		11,065,746			11,246,040			10,464,559			10,886,895			10,987,698

Commitments and contingencies		—			—			—			—			—

Noncontrolling interest:
Redeemable interest in property partnership		—			—			—			—			106,233

Equity:
Stockholders’ equity attributable to Boston Properties, Inc.:
Excess stock, $0.01 par value, 150,000,000 shares authorized, none issued or outstanding		—			—			—			—			—
Preferred stock, $0.01 par value, 50,000,000 shares authorized; 5.25% Series B cumulative redeemable preferred stock, $0.01 par value, liquidation preference $2,500 per share, 92,000 shares authorized, 80,000 shares issued and outstanding		200,000			200,000			200,000			200,000			200,000
Common stock, $0.01 par value, 250,000,000 shares authorized, 153,674,930, 153,604,966, 153,579,966, 153,574,600 and 153,473,931 outstanding, respectively		1,537			1,536			1,536			1,536			1,535
Additional paid-in capital		6,316,191			6,306,723			6,305,687			6,300,780			6,293,556
Dividends in excess of earnings		(702,361	)		(699,048	)		(780,952	)		(627,054	)		(711,239	)
Treasury common stock, at cost		(2,722	)		(2,722	)		(2,722	)		(2,722	)		(2,722	)
Accumulated other comprehensive income (loss)		(79,748	)		(56,706	)		(14,114	)		(20,625	)		1,848

Total stockholders’ equity attributable to Boston Properties, Inc.		5,732,897			5,749,783			5,709,435			5,851,915			5,782,978
Noncontrolling interests:
Common units of the Operating Partnership		612,385			616,095			603,092			620,036			614,988
Property partnerships		1,552,937			1,563,912			1,574,400			1,590,808			1,590,481

Total equity		7,898,219			7,929,790			7,886,927			8,062,759			7,988,447

Total liabilities and equity	$	18,963,965		$	19,175,830		$	18,351,486		$	18,949,654		$	19,082,378

(1)	Represents the portion of the Company’s consolidated development projects that qualifies for interest capitalization. Such portion generally excludes intangible assets.

(2)	At June 30, 2015, approximately $192.3 million was held by a qualified intermediary for possible investment in a like-kind exchange in accordance with Section 1031 of the Internal Revenue Code in connection with a sale of real estate.

(3)

On January 1, 2016, the Company adopted Accounting Standards Update 2015-03, “Simplifying the Presentation of Debt Issuance Costs,” which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The Company retrospectively adopted the guidance resulting in the presentation of deferred financing costs, net (previously included within Deferred Charges, Net) as a reduction to Mortgage Notes Payable, Net and Unsecured Senior Notes, Net for all periods presented. The recognition and measurement guidance for debt issuance costs was not affected.

LOGO

SECOND QUARTER 2016

CONSOLIDATED INCOME STATEMENTS

(unaudited and in thousands, except for per share amounts)


	Three Months Ended
	30-Jun-16			31-Mar-16			31-Dec-15			30-Sep-15			30-Jun-15
Revenue
Rental
Base rent	$	493,386		$	536,128		$	493,141		$	494,300		$	486,609
Recoveries from tenants		85,706			89,586			88,576			91,544			86,795
Parking and other		26,113			24,825			25,132			25,509			26,552

Total rental revenue		605,205			650,539			606,849			611,353			599,956
Hotel revenue		12,808			8,757			10,939			12,619			13,403
Development and management services		5,533			6,689			6,452			5,912			4,862

Total revenue		623,546			665,985			624,240			629,884			618,221

Expenses
Operating		113,212			114,467			112,846			113,962			113,945
Real estate taxes		104,726			104,705			103,796			105,834			100,519
Hotel operating		7,978			7,634			7,888			8,125			8,495
General and administrative (1)		25,418			29,353			24,300			20,944			22,284
Transaction costs		913			25			470			254			208
Depreciation and amortization		153,175			159,448			164,460			153,015			167,844

Total expenses		405,422			415,632			413,760			402,134			413,295

Operating income		218,124			250,353			210,480			227,750			204,926
Other income (expense)
Income from unconsolidated joint ventures		2,234			1,791			2,211			2,647			3,078
Interest and other income		1,524			1,505			440			3,637			1,293
Gains (losses) from investments in securities (1)		478			259			493			(1,515	)		(24	)
Interest expense (2)		(105,003	)		(105,309	)		(106,178	)		(108,727	)		(108,534	)
Losses from early extinguishments of debt		—			—			(22,040	)		—			—

Income before gains on sales of real estate		117,357			148,599			85,406			123,792			100,739
Gains on sales of real estate (3)		—			67,623			81,332			199,479			—

Net income		117,357			216,222			166,738			323,271			100,739
Net income attributable to noncontrolling interests
Noncontrolling interest in property partnerships (4)		(6,814	)		(10,464	)		(10,143	)		(115,240	)		(9,264	)
Noncontrolling interest—redeemable preferred units of the Operating Partnership		—			—			—			—			(3	)
Noncontrolling interest—common units of the Operating Partnership (5)		(11,357	)		(21,393	)		(16,098	)		(21,302	)		(9,394	)

Net income attributable to Boston Properties, Inc.		99,186			184,365			140,497			186,729			82,078
Preferred dividends		(2,589	)		(2,618	)		(2,646	)		(2,647	)		(2,618	)

Net income attributable to Boston Properties, Inc. common shareholders	$	96,597		$	181,747		$	137,851		$	184,082		$	79,460

INCOME PER SHARE OF COMMON STOCK (EPS)
Net income attributable to Boston Properties, Inc. per share—basic	$	0.63		$	1.18		$	0.90		$	1.20		$	0.52

Net income attributable to Boston Properties, Inc. per share—diluted	$	0.63		$	1.18		$	0.90		$	1.20		$	0.52

(1)

General and administrative expense includes $(478), $(259), $(493), $1,515 and $24 and gains (losses) from investments in securities include $478, $259, $493, $(1,515) and $(24) for the three months ended June 30, 2016, March 31, 2016, December 31, 2015, September 30, 2015 and June 30, 2015, respectively, related to the Company’s deferred compensation plan.

(2)

For the three months ended June 30, 2016, March 31, 2016, December 31, 2015, September 30, 2015 and June 30, 2015, interest expense includes $8,461, $8,234, $8,014, $7,800 and $7,594, respectively, consisting of the interest expense on the partner loans for the 767 Fifth Avenue (The GM Building) consolidated joint venture, which amount is allocated to the partners within noncontrolling interests in property partnerships. The Company’s share of the interest expense on its loan to the joint venture eliminates in consolidation.

(3)	See page 44 for additional information.

(4)

For the three months ended September 30, 2015, noncontrolling interest in property partnerships includes approximately $101.1 million consisting of the allocation of the gain on sale of real estate to the outside partners in the consolidated entity that sold 505 9th Street, N.W. located in Washington, DC.

(5)

Equals noncontrolling interest—common units of the Operating Partnership’s share of 10.33%, 10.32%, 10.26%, 10.26% and 10.34% of income before net income attributable to noncontrolling interests in Operating Partnership after deduction for preferred distributions for the three months ended June 30, 2016, March 31, 2016, December 31, 2015, September 30, 2015 and June 30, 2015, respectively.

LOGO

SECOND QUARTER 2016

FUNDS FROM OPERATIONS (FFO)

(unaudited and in thousands, except for per share amounts)


	Three Months Ended
	30-Jun-16		31-Mar-16		31-Dec-15		30-Sep-15		30-Jun-15
Net income attributable to Boston Properties, Inc. common shareholders	$	96,597	$	181,747	$	137,851	$	184,082	$	79,460
Add:
Preferred dividends		2,589		2,618		2,646		2,647		2,618
Noncontrolling interest—common units of the Operating Partnership		11,357		21,393		16,098		21,302		9,394
Noncontrolling interest—redeemable preferred units of the Operating Partnership		—		—		—		—		3
Noncontrolling interests in property partnerships		6,814		10,464		10,143		115,240		9,264
Less:
Gains on sales of real estate		—		67,623		81,332		199,479		—

Income before gains on sales of real estate		117,357		148,599		85,406		123,792		100,739
Add:
Real estate depreciation and amortization (1)		157,431		163,580		167,968		156,489		171,384
Less:
Noncontrolling interests in property partnerships’ share of FFO		26,183		30,019		30,828		35,527		36,699
Noncontrolling interest—redeemable preferred units of the Operating Partnership		—		—		—		—		3
Preferred dividends		2,589		2,618		2,646		2,647		2,618

FFO attributable to the Operating Partnership common unitholders (including Boston Properties, Inc.) (“Basic FFO”)		246,016		279,542		219,900		242,107		232,803
Less:
Noncontrolling interest—common units of the Operating Partnership’s share of funds from operations		25,421		28,854		22,561		24,846		24,072

FFO attributable to Boston Properties, Inc. common shareholders (2)	$	220,595	$	250,688	$	197,339	$	217,261	$	208,731

FFO per share—basic	$	1.44	$	1.63	$	1.28	$	1.41	$	1.36

Weighted average shares outstanding—basic		153,662		153,626		153,602		153,595		153,450

FFO per share—diluted	$	1.43	$	1.63	$	1.28	$	1.41	$	1.36

Weighted average shares outstanding—diluted		153,860		153,917		153,897		153,786		153,815

(1)

Real estate depreciation and amortization consists of depreciation and amortization from the consolidated statements of operations of $153,175, $159,448, $164,460, $153,015 and $167,844 plus BXP’s share of unconsolidated joint venture real estate depreciation and amortization of $4,618, $4,496, $3,994, $3,808 and $3,886, less corporate-related depreciation of $362, $364, $486, $334 and $346 for the three months ended June 30, 2016, March 31, 2016, December 31, 2015, September 30, 2015 and June 30, 2015, respectively.

(2)	Based on weighted average basic shares for the quarter. The Company’s share of Basic FFO for the quarter ended June 30, 2016, March 31, 2016, December 31, 2015, September 30, 2015 and June 30, 2015 was 89.67%, 89.68%, 89.74%, 89.74% and 89.66%, respectively.

LOGO

SECOND QUARTER 2016

RECONCILIATION TO DILUTED FUNDS FROM OPERATIONS

(unaudited and in thousands, except for per share amounts)


	June 30, 2016				March 31, 2016				December 31, 2015				September 30, 2015				June 30, 2015
	Income		Shares/Units		Income		Shares/Units		Income		Shares/Units		Income		Shares/Units		Income		Shares/Units
	(Numerator)		(Denominator)		(Numerator)		(Denominator)		(Numerator)		(Denominator)		(Numerator)		(Denominator)		(Numerator)		(Denominator)
Basic FFO (continued from page 10)	$	246,016		171,370	$	279,542		171,309	$	219,900		171,162	$	242,107		171,160	$	232,803		171,146
Effect of Dilutive Securities Stock-based compensation		—		198		—		291		—		295		—		191		—		365

Diluted FFO	$	246,016		171,568	$	279,542		171,600	$	219,900		171,457	$	242,107		171,351	$	232,803		171,511
Less:
Noncontrolling interest—common units of the Operating Partnership’s share of diluted FFO		25,391		17,708		28,805		17,683		22,522		17,560		24,818		17,565		24,021		17,696

Boston Properties, Inc.’s share of diluted FFO (1)	$	220,625		153,860	$	250,737		153,917	$	197,378		153,897	$	217,289		153,786	$	208,782		153,815

FFO per share—basic	$	1.44			$	1.63			$	1.28			$	1.41			$	1.36

FFO per share—diluted	$	1.43			$	1.63			$	1.28			$	1.41			$	1.36

(1)	Based on weighted average diluted shares for the quarter. The Company’s share for the quarter ended June 30, 2016, March 31, 2016, December 31, 2015, September 30, 2015 and June 30, 2015 was 89.68%, 89.70%, 89.76%, 89.75% and 89.68%, respectively.

LOGO

SECOND QUARTER 2016

FUNDS AVAILABLE FOR DISTRIBUTION (FAD)

(in thousands)


	Three Months Ended
	30-Jun-16			31-Mar-16			31-Dec-15			30-Sep-15			30-Jun-15
Basic FFO (continued from page 11)	$	246,016		$	279,542		$	219,900		$	242,107		$	232,803
2nd generation tenant improvements and leasing commissions		(91,502	)		(67,273	)		(35,036	)		(91,787	)		(54,346	)
Straight-line rent (1) (2)		5,434			(13,792	)		(18,149	)		(12,630	)		(14,024	)
Lease transaction costs that qualify as rent inducements (1) (3)		2,200			5,288			1,945			1,646			3,141
Recurring capital expenditures (4)		(9,344	)		(21,585	)		(17,407	)		(16,934	)		(11,839	)
Hotel improvements, equipment upgrades and replacements		(434	)		(360	)		(1,231	)		(436	)		(272	)
Fair value interest adjustment (1)		(6,732	)		(7,810	)		(8,593	)		(8,062	)		(7,856	)
Fair value lease revenue (1) (5)		(5,776	)		(5,375	)		(4,966	)		(5,937	)		(6,667	)
Straight-line ground rent expense adjustment (6)		935			987			(3,983	)		891			1,106
Non-real estate depreciation		362			364			486			334			346
Stock-based compensation		7,578			10,069			6,358			6,345			5,469
Non-cash gains from early extinguishments of debt		—			—			(3,604	)		—			—
Non-cash termination income adjustment (fair value lease amounts)		141			29			3			(555	)		(1,645	)
Partners’ share of consolidated and unconsolidated joint venture 2nd generation tenant improvement and leasing commissions		9,414			6,929			2,698			26,982			2,005
Unearned portion of capitalized fees		2,697			1,191			451			616			746

Funds available for distribution to common shareholders and common unitholders (FAD)	$	160,989		$	188,204		$	138,872		$	142,580		$	148,967

Distributions to common shareholders and unitholders (excluding any special distributions)	$	111,737		$	111,708		$	111,556		$	111,552		$	111,631
FAD Payout Ratio		69.41	%		59.35	%		80.33	%		78.24	%		74.94	%

INTEREST COVERAGE RATIOS

(in thousands, except for ratio amounts)


	Three Months Ended
	30-Jun-16			31-Mar-16			31-Dec-15			30-Sep-15			30-Jun-15
Income before gains on sales of real estate	$	117,357		$	148,599		$	85,406		$	123,792		$	100,739
Interest expense		105,003			105,309			106,178			108,727			108,534
BXP’s share of interest expense from unconsolidated joint ventures		4,010			4,015			3,908			3,830			3,823
Depreciation and amortization expense		153,175			159,448			164,460			153,015			167,844
BXP’s share of depreciation and amortization expense from unconsolidated joint ventures		4,618			4,496			3,994			3,808			3,886
Losses from early extinguishments of debt		—			—			22,040			—			—
Non-cash termination income adjustment (fair value lease amounts)		141			29			3			(555	)		(1,645	)
Stock-based compensation		7,578			10,069			6,358			6,345			5,469
Straight-line ground rent expense adjustment (6)		935			987			(3,983	)		891			1,106
Straight-line rent (1) (2)		5,434			(13,792	)		(18,149	)		(12,630	)		(14,024	)
Lease transaction costs that qualify as rent inducements (1) (3)		2,200			5,288			1,945			1,646			3,141
Fair value lease revenue (1) (5)		(5,776	)		(5,375	)		(4,966	)		(5,937	)		(6,667	)

Subtotal (A)		394,675			419,073			367,194			382,932			372,206
Divided by:
Interest expense	$	105,003		$	105,309		$	106,178		$	108,727		$	108,534
BXP’s share of interest expense from unconsolidated joint ventures		4,010			4,015			3,908			3,830			3,823
Consolidated fair value interest expense adjustment		11,272			12,321			13,076			13,204			13,110
Interest expense on the partner loans for the 767 Fifth Avenue (the GM Building) consolidated joint venture, which amount is allocated to the partners within noncontrolling interests in property partnerships		(8,461	)		(8,234	)		(8,014	)		(7,800	)		(7,594	)
Consolidated and BXP’s share of unconsolidated joint venture amortization of financing costs		(1,816	)		(1,949	)		(2,034	)		(2,037	)		(1,936	)

Adjusted interest expense excluding capitalized interest (B)	$	110,008		$	111,462		$	113,114		$	115,924		$	115,937
Consolidated and BXP’s share of unconsolidated joint venture capitalized interest		10,222			9,525			8,380			9,223			8,972
Adjusted interest expense including capitalized interest (C)	$	120,230		$	120,987		$	121,494		$	125,147		$	124,909
Interest Coverage Ratio (excluding capitalized interest) (A divided by B)		3.59			3.76			3.25			3.30			3.21

Interest Coverage Ratio (including capitalized interest) (A divided by C)		3.28			3.46			3.02			3.06			2.98

(1)	Includes the Company’s share of consolidated and unconsolidated joint venture amounts.

(2)	During the three months ended June 30, 2016, the Company recognized an aggregate of approximately $15.4 million of lump sum rental income amounts from three tenants that will be straight-lined through each tenant’s lease term. These amounts are in addition to the tenants’ monthly rental payments.

(3)	Consists of lease transaction costs that qualify as rent inducements in accordance with GAAP. Lease transaction costs are generally included in 2nd generation tenant improvements and leasing commissions.

(4)	Recurring capital expenditures does not include planned capital expenditures related to acquisitions and repositioning capital expenditures – see page 43 for additional detail.

(5)	Represents the net adjustment for above- and below-market leases that are being amortized over the terms of the respective leases in place at the property acquisition dates.

(6)

For the three months ended June 30, 2016, March 31, 2016 and December 31, 2015, includes the straight-line impact of the Company’s 99-year ground and air rights lease related to the Company’s 200 Clarendon Street property’s adjacent 100 Clarendon Street garage and Back Bay Station concourse level. The Company has allocated contractual ground lease payments aggregating approximately $34.4 million, which it expects to incur over the next three years with no payments thereafter. The Company is recognizing these amounts on a straight-line basis over the 99-year term of the ground and air rights lease. For additional information, see page 7.

LOGO

SECOND QUARTER 2016

CAPITAL STRUCTURE

(in thousands)

Consolidated Debt


	Aggregate Principal June 30, 2016
	Aggregate Principal June 30, 2016
Mortgage Notes Payable	$	3,135,945
Mezzanine Notes Payable		306,000
Unsecured Line of Credit		—
Unsecured Senior Notes, at face value		6,300,000

Subtotal		9,741,945
Fair Value Interest Adjustment on Mortgage Notes Payable		56,042
Fair Value Interest Adjustment on Mezzanine Notes Payable		1,797
Discount on Unsecured Senior Notes		(12,671	)
Deferred Financing Costs, Net		(33,029	)

Consolidated Debt	$	9,754,084


*Boston Properties Limited Partnership Unsecured Senior Notes*
																									Total/ Weighted Average
Settlement Date		1/20/2016			6/27/2013			4/11/2013			6/11/2012			11/10/2011			11/18/2010			4/19/2010			10/9/2009
Original Principal Amount	$	1,000,000		$	700,000		$	500,000		$	1,000,000		$	850,000		$	850,000		$	700,000		$	700,000		$	6,300,000
Principal Amount at Quarter End	$	1,000,000		$	700,000		$	500,000		$	1,000,000		$	850,000		$	850,000		$	700,000		$	700,000		$	6,300,000
Yield (on issue date)		3.766	%		3.916	%		3.279	%		3.954	%		3.853	%		4.289	%		5.708	%		5.967	%		4.316	%
Coupon		3.650	%		3.800	%		3.125	%		3.850	%		3.700	%		4.125	%		5.625	%		5.875	%		4.194	%
Public Offering Price		99.708	%		99.694	%		99.379	%		99.779	%		99.767	%		99.260	%		99.891	%		99.931	%		99.684	%
Ratings:
S&P		A- (stable)			A- (stable)			A- (stable)			A- (stable)			A- (stable)			A- (stable)			A- (stable)			A- (stable)
Fitch		BBB+ (stable)			BBB+ (stable)			BBB+ (stable)			BBB+ (stable)			BBB+ (stable)			BBB+ (stable)			BBB+ (stable)			BBB+ (stable)
Moody’s		Baa2 (stable)			Baa2 (stable)			Baa2 (stable)			Baa2 (stable)			Baa2 (stable)			Baa2 (stable)			Baa2 (stable)			Baa2 (stable)
Maturity Date		2/1/2026			2/1/2024			9/1/2023			2/1/2023			11/15/2018			5/15/2021			11/15/2020			10/15/2019
Discount	$	2,818		$	1,599		$	2,254		$	1,459		$	726		$	3,256		$	366		$	193		$	12,671
Deferred Financing Costs, Net	$	7,802		$	4,264		$	2,882		$	5,146		$	2,352		$	3,283		$	2,458		$	1,868		$	30,055

Unsecured Senior Notes, net	$	989,380		$	694,137		$	494,864		$	993,395		$	846,922		$	843,461		$	697,176		$	697,939		$	6,257,274

Equity


	Shares/Units Outstanding as of 6/30/2016		Common Stock Equivalents			Equivalent Value (1)
Common Stock		153,675		153,675	(2)	$	20,269,733
Common Operating Partnership Units		18,097		18,097	(3)		2,386,994
5.25% Series B Cumulative Redeemable Preferred Stock		80		—			200,000	(4)

Total Equity				171,772		$	22,856,727

Consolidated Debt						$	9,754,084

Consolidated Market Capitalization						$	32,610,811

BXP’s Share of Unconsolidated Joint Venture Debt (5)						$	350,831
Combined Debt (6)						$	10,104,915
Less:
Partners’ Share of Consolidated Debt (7)						$	976,399
BXP’s Share of Combined Debt (6)						$	9,128,516

BXP’s Share of Combined Market Capitalization (6)						$	31,985,243

(1)	Values based on June 30, 2016 closing price of $131.90 per share of common stock, except the shares of Series B Cumulative Redeemable Preferred Stock have been valued at the liquidation preference of $2,500.00 per share (see Note 4 below).

(2)	Includes 59,777 shares of restricted stock.

(3)

Includes 912,605 long-term incentive plan units (including 166,629 Outperformance Plan Units and 94,933 2013 MYLTIP Units), but excludes an aggregate of 1,314,993 2014, 2015 and 2016 MYLTIP Units because the performance periods for these MYLTIP Units have not ended and therefore none of such units have been earned.

(4)

On or after March 27, 2018, the Company, at its option, may redeem the Series B Preferred Stock for a cash redemption price of $2,500.00 per share ($25.00 per depositary share), plus all accrued and unpaid dividends. The Series B Preferred Stock is not redeemable by the holders, has no maturity date and is not convertible into or exchangeable for any other security of the Company or any of its affiliates.

(5)	For additional detail, see pages 17-18.

(6)	For definitions of Combined Debt, BXP’s Share of Combined Debt and BXP’s Share of Combined Market Capitalization, see pages 47-48.

(7)	Amount is calculated based on the outside partners’ percentage ownership interest in the consolidated joint venture entities.

LOGO

SECOND QUARTER 2016

DEBT ANALYSIS (1)

as of June 30, 2016

(dollars in thousands)

Debt Maturities and Principal Payments


	2016			2017			2018			2019			2020			Thereafter			Total
Floating Rate Debt:
Mortgage Notes Payable	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Unsecured Line of Credit		—			—			—			—			—			—			—

Total Floating Rate Debt	$	—		$	—		$	—		$	—		$	—		$	—		$	—

Fixed Rate Debt:
Mortgage Notes Payable	$	354,330		$	2,067,654		$	18,633		$	19,670		$	20,766		$	654,892		$	3,135,945
Fair Value Interest Adjustment		22,212			33,830			—			—			—			—			56,042
Deferred Financing Costs, Net		(563	)		(691	)		(431	)		(431	)		(431	)		(427	)		(2,974	)

Mortgage Notes Payable, Net		375,979			2,100,793			18,202			19,239			20,335			654,465			3,189,013
Mezzanine Notes Payable		—			306,000			—			—			—			—			306,000
Fair Value Interest Adjustment		704			1,093			—			—			—			—			1,797

Mezzanine Notes Payable		704			307,093			—			—			—			—			307,797
Unsecured Senior Notes, Face Amount		—			—			850,000			700,000			700,000			4,050,000			6,300,000
Discount Amortization		(971	)		(2,001	)		(2,035	)		(1,825	)		(1,830	)		(4,009	)		(12,671	)
Deferred Financing Costs, Net		(2,688	)		(5,378	)		(5,210	)		(4,227	)		(3,701	)		(8,851	)		(30,055	)

Unsecured Senior Notes, Net		(3,659	)		(7,379	)		842,755			693,948			694,469			4,037,140			6,257,274

Total Fixed Rate Debt	$	373,024		$	2,400,507		$	860,957		$	713,187		$	714,804		$	4,691,605		$	9,754,084

Consolidated Debt	$	373,024		$	2,400,507		$	860,957		$	713,187		$	714,804		$	4,691,605		$	9,754,084

GAAP Weighted Average Floating Rate Debt (2)		—			—			—			—			—			—			—
GAAP Weighted Average Fixed Rate Debt (2)		6.98	%		3.77	%		3.89	%		5.96	%		5.70	%		3.23	%		4.32	%

Total GAAP Weighted Average Rate (2)		6.98	%		3.77	%		3.89	%		5.96	%		5.70	%		3.23	%		4.32	%

Total Stated Weighted Average Rate		6.94	%		5.78	%		3.77	%		5.87	%		5.63	%		3.17	%		4.77	%

Unsecured Line of Credit - Matures July 26, 2018


	Outstanding		Letters of		Remaining Capacity
Facility	at 6/30/2016		Credit		at 6/30/2016
$1,000,000	$	—	$	16,087	$	983,913

Unsecured and Secured Debt Analysis


	% of Total Debt			Stated Weighted Average Rate			GAAP Weighted Average Rate			Weighted Average Maturity (years)
Unsecured Debt		64.15	%		4.23	%		4.32	%		5.8
Secured Debt		35.85	%		5.72	%		4.33	%		2.0

Consolidated Debt		100.00	%		4.77	%		4.32	%		4.4

Floating and Fixed Rate Debt Analysis


	% of Total Debt			Stated Weighted Average Rate			GAAP Weighted Average Rate			Weighted Average Maturity (years)
Floating Rate Debt		—			—			—			—
Fixed Rate Debt		100.00	%		4.77	%		4.32	%		4.4

Consolidated Debt		100.00	%		4.77	%		4.32	%		4.4

Interest Rate Hedging Instruments


	Notional Amount		Weighted-Average 10-Year Swap Rate			Effective Date		Termination Date
Forward-starting interest rate swaps	$	550,000		2.423	%		September 1, 2016		September 1, 2026
Forward-starting interest rate swaps (3)		450,000		2.619	%		June 1, 2017		June 1, 2027

(1)	Excludes unconsolidated joint ventures. For information on BXP’s unconsolidated joint venture debt, see pages 17-18.

(2)	The GAAP interest rate differs from the stated interest rate due to the inclusion of the amortization of financing charges, effects of hedging transactions and adjustments required to reflect loans at their fair values upon acquisition or consolidation.

(3)	Represents forward interest rate swap contracts entered into by the Company’s 767 Fifth Partners LLC consolidated entity (the entity in which the Company has a 60% interest and that owns 767 Fifth Avenue (the GM Building) in New York City).

LOGO

SECOND QUARTER 2016

DEBT MATURITIES AND PRINCIPAL PAYMENTS (1)

as of June 30, 2016

(dollars in thousands)


Property	2016			2017			2018			2019			2020			Thereafter			Total
767 Fifth Avenue (The GM Building) (60% ownership)	$	—		$	1,300,000		$	—		$	—		$	—		$	—		$	1,300,000	(2)
599 Lexington Avenue		—			750,000			—			—			—			—			750,000
601 Lexington Avenue (55% ownership)		6,297			13,051			13,684			14,349			15,045			630,486			692,912
Embarcadero Center Four		345,854			—			—			—			—			—			345,854
New Dominion Technology Park, Building One		1,360			2,878			3,100			3,340			3,598			22,906			37,182
University Place		819			1,725			1,849			1,981			2,123			1,500			9,997

		354,330			2,067,654			18,633			19,670			20,766			654,892			3,135,945
Fair Value Interest Adjustment		22,212			33,830			—			—			—			—			56,042
Deferred Financing Costs, Net		(563	)		(691	)		(431	)		(431	)		(431	)		(427	)		(2,974	)

		375,979			2,100,793			18,202			19,239			20,335			654,465			3,189,013

Mezzanine Notes Payable (associated with 767 Fifth
Avenue (The GM Building)) (60% ownership)		—			306,000			—			—			—			—			306,000
Fair Value Interest Adjustment		704			1,093			—			—			—			—			1,797

		704			307,093			—			—			—			—			307,797

Unsecured Senior Notes, Face Amount		—			—			850,000			700,000			700,000			4,050,000			6,300,000
Aggregate Discount Amortization		(971	)		(2,001	)		(2,035	)		(1,825	)		(1,830	)		(4,009	)		(12,671	)
Deferred Financing Costs, Net		(2,688	)		(5,378	)		(5,210	)		(4,227	)		(3,701	)		(8,851	)		(30,055	)

		(3,659	)		(7,379	)		842,755			693,948			694,469			4,037,140			6,257,274

Unsecured Line of Credit		—			—			—			—			—			—			—

	$	373,024		$	2,400,507		$	860,957		$	713,187		$	714,804		$	4,691,605		$	9,754,084

% of Consolidated Debt		3.82	%		24.61	%		8.83	%		7.31	%		7.33	%		48.10	%		100.00	%
Balloon Payments	$	343,255		$	2,356,000		$	850,000		$	700,000		$	700,000		$	4,683,554		$	9,632,809
Scheduled Principal Amortization	$	11,075		$	17,654		$	18,633		$	19,670		$	20,766		$	21,338		$	109,136

(1)	Excludes unconsolidated joint ventures. For information on BXP’s unconsolidated joint venture debt, see pages 17-18.

(2)	This property has a fair value interest adjustment that is shown on the Fair Value Interest Adjustment line.

LOGO

SECOND QUARTER 2016

SENIOR UNSECURED DEBT COVENANT COMPLIANCE RATIOS

(in thousands)

In the fourth quarter of 2002, the Company’s Operating Partnership (Boston Properties Limited Partnership) received investment grade ratings on its senior unsecured debt securities and thereafter issued unsecured notes. The notes were issued under an indenture, dated as of December 13, 2002, by and between Boston Properties Limited Partnership and The Bank of New York Mellon Trust Company, N.A., as trustee, as supplemented from time to time (the “Indenture”), which, among other things, requires us to comply with the following limitations on incurrence of debt: Limitation on Outstanding Debt; Limitation on Secured Debt; Ratio of Annualized Consolidated EBITDA to Annualized Interest Expense; and Maintenance of Unencumbered Assets. Compliance with these restrictive covenants requires us to apply specialized terms the meanings of which are described in detail in our filings with the SEC, and to calculate ratios in the manner prescribed by the indenture.

This section presents such ratios as of June 30, 2016 to show that the Company’s Operating Partnership was in compliance with the terms of the Indenture, which has been filed with the SEC. Management is not presenting these ratios and the related calculations for any other purpose or for any other period, and is not intending for these measures to otherwise provide information to investors about the Company’s financial condition or results of operations. Investors should not rely on these measures other than for purposes of testing our compliance with the Indenture. This section also presents certain other indenture-related data that we believe assists investors in the Company’s unsecured debt securities.


			Senior Notes			Senior Notes
			Issued Prior to			Issued On or After
			October 9, 2009			October 9, 2009
			June 30, 2016
Total Assets:
Capitalized Property Value (1)			$	22,371,989		$	22,818,682
Cash and Cash Equivalents				1,180,044			1,180,044
Investments in Securities				21,775			21,775
Undeveloped Land, at Cost (including Joint Venture %)				297,966			297,966
Development in Process, at Cost (including Joint Venture %)				940,063			940,063

Total Assets			$	24,811,837		$	25,258,530

Unencumbered Assets			$	18,396,848		$	18,772,443

Secured Debt (Fixed and Variable) (2)			$	3,135,945		$	3,135,945
Mezzanine Notes Payable (3)				306,000			306,000
Joint Venture Debt (4)				352,104			352,104
Related Party Notes Payable				180,000			180,000
Contingent Liabilities & Letters of Credit				22,583			22,583
Unsecured Debt (5)				6,300,000			6,300,000

Total Outstanding Debt			$	10,296,632		$	10,296,632

Consolidated EBITDA:
Income before Gains on Sales of Real Estate (per Consolidated Income Statement)			$	117,357		$	117,357
Subtract: Income from Unconsolidated Joint Ventures (per Consolidated Income Statement)				(2,234	)		(2,234	)
Subtract: Gains from Investments in Securities (per Consolidated Income Statement)				(478	)		(478	)
Add: Interest Expense (per Consolidated Income Statement)				105,003			105,003
Add: Depreciation and Amortization (per Consolidated Income Statement)				153,175			153,175

EBITDA				372,823			372,823
Add: BXP’s share of unconsolidated joint venture EBITDA				10,672			10,672

Consolidated EBITDA			$	383,495		$	383,495

Adjusted Interest Expense:
Interest Expense (per Consolidated Income Statement)			$	105,003		$	105,003
Add: BXP’s share of unconsolidated joint venture interest expense				4,010			4,010
Less: Amortization of financing costs (including BXP’s Share of Unconsolidated Joint Ventures)				(1,816	)		(1,816	)
Less: Interest expense funded by construction loan draws				(72	)		(72	)

Adjusted Interest Expense			$	107,125		$	107,125


Covenant Ratios and Related Data	Test		Actual			Actual
Total Outstanding Debt/Total Assets		Less than 60%		41.5	%		40.8	%
Secured Debt/Total Assets		Less than 50%		15.3	%		15.0	%
Interest Coverage (Annualized Consolidated EBITDA to Annualized Interest Expense)		Greater than 1.50x		3.58			3.58
Unencumbered Assets/ Unsecured Debt		Greater than 150%		292.0	%		298.0	%

Unencumbered Consolidated Property EBITDA (6)			$	297,220		$	297,220

Unencumbered Interest Coverage (Unencumbered Consolidated Property EBITDA to Unsecured Interest Expense)				4.44			4.44

% of Unencumbered Consolidated Property EBITDA to Consolidated EBITDA				77.5	%		77.5	%

# of in-service unencumbered properties				145			145

(1)

For senior notes issued prior to October 9, 2009, Capitalized Property Value is determined for each property and is the greater of (A) annualized EBITDA capitalized at an 8.5% rate for CBD properties and a 9.0% rate for non-CBD properties, and (B) the undepreciated book value as determined under GAAP. Capitalized Property Value for senior notes issued on or after October 9, 2009 is determined for each property and is the greater of (A) annualized EBITDA capitalized at an 8.0% rate for CBD properties and a 9.0% rate for non-CBD properties, and (B) the undepreciated book value as determined under GAAP.

(2)	Excludes aggregate fair value interest adjustment of $56,042 and deferred financing costs, net of $2,974.

(3)	Excludes aggregate fair value interest adjustment of $1,797.

(4)	Excludes aggregate deferred financing costs, net of $1,273.

(5)	Excludes aggregate debt discount of $12,671 and deferred financing costs, net of $30,055.

(6)

Unencumbered Consolidated Property EBITDA is a non-GAAP financial measure equal to Consolidated EBITDA excluding corporate revenue and expenses, encumbered consolidated Property EBITDA, EBITDA from land and properties that have either been disposed of or not fully placed in-service and items that, in the Company’s view, are not representative of a property’s standard ongoing performance, such as termination income and other similar items. For the three months ended June 30, 2016, these excluded amounts were approximately $(18,330), $98,733, $(73) and $5,945, respectively.

LOGO

SECOND QUARTER 2016

UNCONSOLIDATED JOINT VENTURE DEBT ANALYSIS (*)

as of June 30, 2016

(dollars in thousands)

Debt Maturities and Principal Payments by Property


Property	2016			2017			2018			2019			2020			Thereafter			Total
Metropolitan Square (51%)	$	675		$	1,410		$	1,493		$	1,582		$	80,327		$	—		$	85,487
540 Madison Avenue (60%)		—			—			72,000			—			—			—			72,000
Market Square North (50%)		554			1,148			1,205			1,265			58,091			—			62,263
901 New York Avenue (25%)		—			—			—			—			955			55,295			56,250
500 North Capitol Street, N.W. (30%)		—			—			—			—			—			31,500			31,500
Annapolis Junction Building One (50%)		140			279			19,519			—			—			—			19,938	(1)
Annapolis Junction Building Six (50%)		6,545			—			—			—			—			—			6,545
Annapolis Junction Building Seven (50%)		—			10,797			—			—			—			—			10,797	(2)
Annapolis Junction Building Eight (50%)		—			7,324			—			—			—			—			7,324	(3)

		7,914			20,958			94,217			2,847			139,373			86,795			352,104
Deferred Financing Costs, Net		(207	)		(359	)		(219	)		(156	)		(111	)		(221	)		(1,273	)

BXP’s Share of Unconsolidated Joint Venture Debt	$	7,707		$	20,599		$	93,998		$	2,691		$	139,262		$	86,574		$	350,831

GAAP Weighted Average Rate		3.15	%		2.79	%		2.25	%		5.15	%		5.42	%		3.87	%		3.99	%
% of Total Debt		2.25	%		5.95	%		26.76	%		0.81	%		39.58	%		24.65	%		100.00	%
Balloon Payments	$	6,544		$	18,121		$	91,472		$	—		$	136,880		$	81,932		$	334,949
Scheduled Amortization	$	1,370		$	2,837		$	2,745		$	2,847		$	2,493		$	4,863		$	17,155

Floating and Fixed Rate Debt Analysis


				Stated Weighted			GAAP Weighted			Weighted Average
	% of Total Debt			Average Rate			Average Rate			Maturity (years)
Floating Rate Debt		33.12	%		2.04	%		2.26	%		1.6
Fixed Rate Debt		66.88	%		4.79	%		4.85	%		5.5

Total Debt		100.00	%		3.88	%		3.99	%		4.2

(*)	All amounts represent the Company’s share based on its ownership percentage.

(1)

On April 11, 2016, a Notice of Event of Default was received from the lender because the loan to value ratio is not in compliance with the applicable covenant in the loan agreement. The joint venture is currently in discussions with the lender regarding curing the default, but there can be no assurance as to the outcome of those discussions. Loan has one, three-year extension option, subject to certain conditions.

(2)	Loan has one, one-year extension option, subject to certain conditions.

(3)	Loan has two, one-year extension options, subject to certain conditions.

LOGO

SECOND QUARTER 2016

UNCONSOLIDATED JOINT VENTURES

(unaudited and dollars in thousands)

Balance Sheet Information

as of June 30, 2016


	540 Madison			Market Square			Metropolitan			901 New York			Wisconsin			Annapolis			500 North Capitol			The Hub on Causeway			1001						1265 Main			Total Unconsolidated
	Avenue			North			Square			Avenue			Place (1)			Junction (2)			Street, N.W.			(Phase 1)			6th Street			Dock72			Street			Joint Ventures
Net Equity (3) (4)	$	68,729		$	(9,005	)	$	9,401		$	(11,280	)	$	42,533		$	21,424		$	(3,644	)	$	27,858		$	42,544		$	18,513		$	21,616		$	228,689

Mortgage/Construction loans payable, net (3)	$	71,766		$	62,084		$	85,288		$	55,871		$	—		$	44,445		$	31,377		$	—		$	—		$	—		$	—		$	350,831

BXP’s nominal ownership percentage		60.00	%		50.00	%		51.00	%		25.00	%		33.33	%		50.00	%		30.00	%		50.00	%		50.00	%		50.00	%		50.00	%


*Results of Operations*
for the three months ended June 30, 2016

	540 Madison			Market Square			Metropolitan			901 New York			Wisconsin			Annapolis			500 North Capitol			The Hub on Causeway			1001						1265 Main			Total Unconsolidated
	Avenue			North			Square			Avenue			Place (1)			Junction (2)			Street, N.W.			(Phase 1)			6th Street			Dock72			Street			Joint Ventures
REVENUE
Rental (5)	$	6,413		$	4,401		$	4,393		$	6,290		$	1,035		$	3,043		$	2,623		$	—		$	246		$	—		$	—		$	28,444
Operating recoveries		980			772			1,262			1,145			263			722			1,136			—			—			—			—			6,280
Straight-line rent		204			465			2,071			555			—			43			300			—			—			—			—			3,638
Fair value lease revenue		(1	)		—			—			—			—			—			—			—			—			—			—			(1	)
Termination Income		7			—			—			—			—			—			—			—			—			—			—			7

Total revenue		7,603			5,638			7,726			7,990			1,298			3,808			4,059			—			246			—			—			38,368

EXPENSES
Operating		3,640			2,148			3,433			3,322			548			1,649			1,322			—			297			—			—			16,359

NET OPERATING INCOME		3,963			3,490			4,293			4,668			750			2,159			2,737			—			(51	)		—			—			22,009
Interest		640			1,533			2,438			2,075			—			560			1,137			—			—			—			—			8,383
Depreciation and amortization		1,846			967			1,698			1,356			1,383			1,032			922			—			—			—			—			9,204

SUBTOTAL		2,486			2,500			4,136			3,431			1,383			1,592			2,059			—			—			—			—			17,587

NET INCOME/(LOSS)	$	1,477		$	990		$	157		$	1,237		$	(633	)	$	567		$	678		$	—		$	(51	)	$	—		$	—		$	4,422

BXP’s share of net income/(loss)	$	886		$	495		$	80		$	341	(6)	$	(211	)	$	284		$	203		$	—		$	(26	)	$	—		$	—			2,052
Basis differential (7)		170			(4	)		27			(8	)		(7	)		(1	)		5			—			—			—			—			182

Income/(loss) from unconsolidated joint ventures	$	1,056		$	491		$	107		$	333	(6)	$	(218	)	$	283		$	208		$	—		$	(26	)	$	—		$	—		$	2,234
BXP’s share of depreciation & amortization		997			492			878			979	(6)		466			521			285			—			—			—			—			4,618

BXP’s share of Funds from Operations (FFO)	$	2,053		$	983		$	985		$	1,312		$	248		$	804		$	493		$	—		$	(26	)	$	—		$	—		$	6,852

BXP’s share of revenue (8) (9)	$	4,562		$	2,819		$	3,940		$	3,826	(6)	$	433		$	1,904		$	1,218		$	—		$	123		$	—		$	—		$	18,825

BXP’s share of interest expense	$	384		$	767		$	1,243		$	994	(6)	$	—		$	281		$	341		$	—		$	—		$	—		$	—		$	4,010

BXP’s share of net operating income/(loss) (9)	$	2,378		$	1,745		$	2,189		$	2,235	(6)	$	250		$	1,080		$	821		$	—		$	(26	)	$	—		$	—		$	10,672

(1)	Represents the Company’s interest in the joint venture entity that owns the land, parking garage and infrastructure. The Company’s entity that owns 100% of the office component of the project is consolidated within the accounts of the Company.

(2)	Annapolis Junction includes four properties in service and two undeveloped land parcels.

(3)	Represents the Company’s share.

(4)	As of June 30, 2016, certain investments with deficit balances aggregating ($23,929) have been reflected within Other Liabilities on the Company’s Consolidated Balance Sheet.

(5)	Includes approximately $64 of management services income and approximately $37 of interest and other income.

(6)	Reflects the allocation percentages pursuant to the achievement of specified investment return thresholds as provided for in the joint venture agreement.

(7)	Represents adjustments related to the carrying values and depreciation of certain of the Company’s investment in unconsolidated joint ventures.

(8)	Includes the Company’s share of approximately $2,955 of operating recoveries.

(9)	Includes the Company’s share of approximately $37 of management services income and approximately $17 of interest and other income.

LOGO

SECOND QUARTER 2016

CONSOLIDATED JOINT VENTURES

(unaudited and in thousands)

Balance Sheets

as of June 30, 2016



BXP’s ownership percentage	60.00%			55.00%		95.00%

				Norges Joint Ventures
	767 Fifth Avenue (The GM Building)			Times Square Tower 601 Lexington Avenue 100 Federal Street Atlantic Wharf Office		Salesforce Tower		Total Consolidated Joint Ventures
ASSETS
Real estate, net	$	3,453,393		$	2,210,827	$	585,773	$	6,249,993
Cash and cash held in escrows		62,831			152,832		2,459		218,122
Other assets		137,749			177,839		637		316,225

Total assets	$	3,653,973		$	2,541,498	$	588,869	$	6,784,340

LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net	$	1,355,840		$	690,988	$	—	$	2,046,828
Mezzanine notes payable		307,797			—		—		307,797
Related party notes payable		180,000			—		—		180,000
Accrued interest on related party notes		136,131			—		—		136,131
Other liabilities		191,475			61,151		63,363		315,989

Total liabilities		2,171,243			752,139		63,363		2,986,745

Equity:
Boston Properties, Inc.		1,079,687	(1)		663,081		501,814		2,244,582
Noncontrolling interests		403,043			1,126,278		23,692		1,553,013	(2)

Total equity		1,482,730			1,789,359		525,506		3,797,595

Total liabilities and equity	$	3,653,973		$	2,541,498	$	588,869	$	6,784,340

(1)	Amount is adjusted for related party notes and accrued interest that are allocated to BXP’s partners through Noncontrolling interests.

(2)	Amount excludes preferred shareholders capital of approximately $0.1 million.

LOGO

SECOND QUARTER 2016

CONSOLIDATED JOINT VENTURES

(unaudited and in thousands)

Income Statements

for the three months ended June 30, 2016


BXP’s ownership percentage	60.00%			55.00%			95.00%

				Norges Joint Ventures
	767 Fifth Avenue (The GM Building)			Times Square Tower 601 Lexington Avenue 100 Federal Street Atlantic Wharf Office			Salesforce Tower		Total Consolidated Joint Ventures
REVENUE
Rental	$	61,953		$	89,130		$	—	$	151,083
Straight-line rent		4,954			(2,808	)		—		2,146
Fair value lease revenue		5,774			1,603			—		7,377
Termination income		(102	)		188			—		86
Parking and other		672			1,463			—		2,135

Total revenue		73,251			89,576			—		162,827

EXPENSES
Operating		26,232			33,131			—		59,363

NET OPERATING INCOME		47,019			56,445			—		103,464
Management services income		(292	)		(430	)		—		(722	)
Interest and other income		(25	)		(188	)		—		(213	)
Interest expense		23,865			8,325			—		32,190
Interest expense—partner notes		8,461			—			—		8,461
Fair value adjustment to interest expense		(11,350	)		—			—		(11,350	)
Depreciation and amortization		24,255			21,513			—		45,768
Other		—			39			—		39

SUBTOTAL		44,914			29,259			—		74,173

NET INCOME/(LOSS)	$	2,105		$	27,186		$	—	$	29,291

Partners’ share of NOI	$	18,808		$	25,400		$	—	$	44,208

BXP’s share of NOI	$	28,211		$	31,045		$	—	$	59,256

Unearned portion of capitalized fees (1)	$	778		$	1,919		$	—	$	2,697

Reconciliation of partners’ noncontrolling interest (NCI):
Net income/(loss)	$	2,105		$	27,186		$	—	$	29,291
Add back depreciation & amortization—BXP’s basis difference		20			45			—		65
Special allocation—BXP’s basis		—			429			—		429
Add back partners’ share of partner loan interest		8,461			—			—		8,461

Net income/(loss) before interest allocation	$	10,586		$	27,660		$	—	$	38,246

Partners’ NCI share of net income before interest allocation	$	4,232		$	12,447		$	—	$	16,679
Partners’ share of partner loan interest		(8,461	)		—			—		(8,461	)
Allocation of management and other fees to non-controlling partner		(616	)		(788	)		—		(1,404	)
Accretion and adjustments		—			—			—		—

Partners’ NCI	$	(4,845	)	$	11,659		$	—	$	6,814

Reconciliation of partners’ share of FFO:
Net income/(loss)	$	2,105		$	27,204		$	—	$	29,309
Add back depreciation & amortization		24,255			21,513			—		45,768

Entity FFO	$	26,360		$	48,717		$	—	$	75,077

Partners’ share of net income/(loss)	$	850		$	12,278		$	—	$	13,128
Partners’ share of partner loan interest not in partner’s share of entity FFO		(5,076	)		—			—		(5,076	)
Allocation of management and other fees to non-controlling partner		(616	)		(788	)		—		(1,404	)
Partners’ share of depreciation and amortization		9,694			9,654			—		19,348
Accretion and adjustments		—			187			—		187

Partners’ share FFO	$	4,852		$	21,331		$	—	$	26,183

Reconciliation of BXP’s share of FFO
BXP’s share of net income/(loss) adjusted for partners’ NCI	$	6,950		$	15,527		$	—	$	22,477
Depreciation & amortization—BXP’s basis difference		20			60			—		80
BXP’s share of depreciation & amortization		14,538			11,799			—		26,337

BXP’s share of FFO	$	21,508		$	27,386		$	—	$	48,894

Reconciliation of Partners’ share of Net Operating Income (2)
Rental revenue	$	29,300		$	40,309		$	—	$	69,609
Less: Termination income		(41	)		85			—		44

Rental revenue (excluding termination income)		29,341			40,224			—		69,565
Operating expenses		10,492			14,909			—		25,401

Net Operating Income (excluding termination income)	$	18,849		$	25,315		$	—	$	44,164

Rental revenue (excluding termination income)	$	29,341		$	40,224			—	$	69,565
Less: Straight-line rent and fair value lease revenue		4,291			(542	)		—		3,749
Add: Lease transaction costs that qualify as inducements in accordance with GAAP (3)		—			—			—		—

Subtotal		25,050			40,766			—		65,816
Less: Operating expenses		10,492			14,909			—		25,401
Less: Straight-line ground rent expense		—			—			—		—

Net Operating Income—cash basis (excluding termination income)	$	14,558		$	25,857		$	—	$	40,415

(1)	Capitalized fees are eliminated in consolidation and recognized over the life of the asset as depreciation and amortization are added back to the Company’s net income.

(2)	Amounts are calculated based on outside partners’ ownership interests.

(3)	Leasing transaction costs are generally included in 2nd generation tenant improvements and leasing commissions in the Company’s FAD calculation on page 12. For additional information related to second generation transaction costs, see page 42.

LOGO

SECOND QUARTER 2016

PORTFOLIO OVERVIEW

for the three months ended June 30, 2016

(dollars in thousands)

Rentable Square Footage and Percentage of BXP’s Share of Combined Net Operating Income of In-Service Properties by Location and Type of Property (1) (2) (3)


Geographic Area	Square Feet Office (4)			% of NOI Office			Square Feet Residential			% of NOI Residential			Square Feet Hotel			% of NOI Hotel			Square Feet Total			% of NOI Total
Boston		13,643,355	(5)		29.0	%		87,097			0.2	%		334,260			1.4	%		14,064,712			30.6	%
New York		11,713,559	(5)		32.5	%		—			—			—			—			11,713,559			32.5	%
San Francisco		6,075,508			15.1	%		—			—			—			—			6,075,508			15.1	%
Washington, DC		10,560,830	(5)		21.3	%		355,347			0.5	%		—			—			10,916,177			21.8	%

Total		41,993,252	(5)		97.9	%		442,444			0.7	%		334,260			1.4	%		42,769,956			100.0	%

% of Total		98.2	%					1.0	%					0.8	%					100.0	%

Percentage of BXP’s Share of Combined Net Operating Income of In-Service Properties by Location (1) (2) (3)


Geographic Area	CBD			Suburban			Total
Boston		24.2	%		6.4	%		30.6	%
New York		30.0	%		2.5	%		32.5	%
San Francisco		11.8	%		3.3	%		15.1	%
Washington, DC		9.4	%		12.4	%		21.8	%

Total		75.4	%		24.6	%		100.0	%

Rentable Square Footage and Rental Revenue of In-Service Properties by Unit Type (6)


Unit Type	Square Feet		Revenue from Consolidated Portfolio			Revenue from Unconsolidated Joint Ventures Portfolio (7)		Total		% of Total
Office		39,766,556	$	455,754		$	13,768	$	469,522		85.7	%
Retail		2,266,752		34,275			832		35,107		6.4	%
Residential		406,648		3,424			—		3,424		0.6	%
Hotel		330,000		12,732	(8)		—		12,732		2.3	%
Parking and other		N/A		26,113	(9)		1,216		27,329		5.0	%

Total		42,769,956	$	532,298		$	15,816	$	548,114		100.0	%

(1)	For the definition of In-Service Properties and related disclosures, see page 49.

(2)

BXP’s Share of Combined Net Operating Income (NOI) is a non-GAAP financial measure. For a quantitative reconciliation of BXP’s Share of Combined NOI to Net Income attributable to Boston Properties, Inc. common shareholders, see page 40. For disclosures relating to the Company’s use of BXP’s Share of Combined NOI, see page 47.

(3)	The calculation for percentage of BXP’s Share of Combined NOI excludes termination income.

(4)	Includes approximately 2,200,000 square feet of retail space.

(5)	Includes 100% of the rentable square footage of the Company’s In-Service Properties. For additional detail relating to the Company’s In-Service Properties, see pages 22-24.

(6)	Excludes recoveries from tenants.

(7)	Represents the Company’s share. For additional information on unconsolidated joint ventures, see page 18.

(8)	Excludes approximately $67 of base rent from retail tenants which is included in Retail above and approximately $9 of recoveries from tenants.

(9)	Includes approximately $2,600 of other income.

LOGO

SECOND QUARTER 2016

IN-SERVICE PROPERTY LISTING

as of June 30, 2016


	Sub Market	Number of Buildings		Square Feet		Leased % (1)			Annualized Rental Obligations Per Leased SF (2)		Encumbered with secured debt (Y/N)	Central Business District (CBD) or Suburban (S)
Boston
Office
200 Clarendon Street	CBD Boston MA		1		1,746,245		80.2	%	$	63.36	N	CBD
100 Federal Street (55% ownership)	CBD Boston MA		1		1,273,968		85.8	%		51.24	N	CBD
800 Boylston Street—The Prudential Center	CBD Boston MA		1		1,229,384		93.0	%		59.58	N	CBD
111 Huntington Avenue—The Prudential Center	CBD Boston MA		1		860,455		100.0	%		62.95	N	CBD
Atlantic Wharf Office (55% ownership)	CBD Boston MA		1		793,827		100.0	%		67.20	N	CBD
101 Huntington Avenue—The Prudential Center	CBD Boston MA		1		505,249		94.7	%		48.76	N	CBD
(3) Prudential Center (retail shops)	CBD Boston MA		1		491,748		97.2	%		82.47	N	CBD
(3) Star Market at the Prudential Center	CBD Boston MA		1		57,235		100.0	%		54.37	N	CBD

			8		6,958,111		90.6	%	$	61.28

355 Main Street	East Cambridge MA		1		265,342		100.0	%	$	69.91	N	CBD
90 Broadway	East Cambridge MA		1		223,771		100.0	%		50.68	N	CBD
255 Main Street	East Cambridge MA		1		215,629		100.0	%		55.13	N	CBD
300 Binney Street	East Cambridge MA		1		195,191		100.0	%		53.19	N	CBD
150 Broadway	East Cambridge MA		1		177,226		100.0	%		47.44	N	CBD
105 Broadway	East Cambridge MA		1		152,664		100.0	%		60.84	N	CBD
325 Main Street	East Cambridge MA		1		115,361		100.0	%		46.67	N	CBD
145 Broadway	East Cambridge MA		1		79,616		100.0	%		56.50	N	CBD
250 Binney Street	East Cambridge MA		1		67,362		100.0	%		42.75	N	CBD
University Place	Mid-Cambridge MA		1		195,282		100.0	%		47.26	Y	CBD

			10		1,687,444		100.0	%	$	54.44

Bay Colony Corporate Center	Route 128 Mass Turnpike MA		4		1,009,135		80.5	%	$	35.61	N	S
Reservoir Place	Route 128 Mass Turnpike MA		1		528,885		99.3	%		34.05	N	S
140 Kendrick Street	Route 128 Mass Turnpike MA		3		380,987		84.2	%		37.22	N	S
Weston Corporate Center	Route 128 Mass Turnpike MA		1		356,995		100.0	%		52.21	N	S
Waltham Weston Corporate Center	Route 128 Mass Turnpike MA		1		306,687		93.8	%		34.03	N	S
230 CityPoint	Route 128 Mass Turnpike MA		1		300,573		85.1	%		34.30	N	S
200 West Street	Route 128 Mass Turnpike MA		1		256,245		97.8	%		35.38	N	S
(4) 10 CityPoint	Route 128 Mass Turnpike MA		1		241,460		92.7	%		31.30	N	S
77 CityPoint	Route 128 Mass Turnpike MA		1		209,707		100.0	%		47.52	N	S
195 West Street	Route 128 Mass Turnpike MA		1		63,500		100.0	%		40.79	N	S
Quorum Office Park	Route 128 Northwest MA		2		267,527		90.0	%		18.90	N	S
Lexington Office Park	Route 128 Northwest MA		2		166,858		88.1	%		26.73	N	S
191 Spring Street	Route 128 Northwest MA		1		158,900		100.0	%		31.14	N	S
40 Shattuck Road	Route 128 Northwest MA		1		121,542		68.7	%		21.64	N	S
91 Hartwell Avenue	Route 128 Northwest MA		1		119,216		100.0	%		26.93	N	S
201 Spring Street	Route 128 Northwest MA		1		106,300		100.0	%		37.81	N	S
33 Hayden Avenue	Route 128 Northwest MA		1		80,872		100.0	%		44.61	N	S
32 Hartwell Avenue	Route 128 Northwest MA		1		69,154		100.0	%		24.47	N	S
164 Lexington Road	Route 128 Northwest MA		1		64,140		0.0	%		—	N	S
100 Hayden Avenue	Route 128 Northwest MA		1		55,924		100.0	%		44.26	N	S
181 Spring Street	Route 128 Northwest MA		1		55,793		100.0	%		31.34	N	S
92 Hayden Avenue	Route 128 Northwest MA		1		31,100		100.0	%		41.91	N	S
17 Hartwell Avenue	Route 128 Northwest MA		1		30,000		0.0	%		—	N	S
(3)(4) The Point (formerly 99 Third Avenue Retail)	Route 128 Northwest MA		1		16,300		84.7	%		50.24	N	S

			31		4,997,800		89.4	%	$	35.44

	Total Boston Office:		49		13,643,355		91.3	%	$	51.02

Residential
The Lofts at Atlantic Wharf (86 units)	CBD Boston MA		1		87,097						N	CBD

	Total Boston Residential:		1		87,097

Hotel
Boston Marriott Cambridge (433 rooms)	East Cambridge MA		1		334,260						N	CBD

	Total Boston Hotel:		1		334,260

	Total Boston:		51		14,064,712

(1)	Represents signed leases for which revenue recognition has commenced in accordance with GAAP.

(2)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(3)	This is a retail property.

(4)	Not included in Same Property analysis.

LOGO

SECOND QUARTER 2016

IN-SERVICE PROPERTY LISTING (continued)

as of June 30, 2016


	Sub Market	Number of Buildings		Square Feet		Leased % (1)			Annualized Rental Obligations Per Leased SF (2)		Encumbered with secured debt (Y/N)		Central Business District (CBD) or Suburban (S)
New York
Office
767 Fifth Avenue (The GM Building) (60% ownership)	Plaza District NY		1		1,823,656		98.8	%	$	138.89		Y		CBD
399 Park Avenue	Park Avenue NY		1		1,710,383		97.8	%		91.03		N		CBD
(3) 601 Lexington Avenue (55% ownership)	Park Avenue NY		1		1,647,554		87.2	%		96.10		Y		CBD
599 Lexington Avenue	Park Avenue NY		1		1,058,063		95.3	%		87.41		Y		CBD
Times Square Tower (55% ownership)	Times Square NY		1		1,248,164		99.7	%		76.80		N		CBD
250 West 55th Street	Times Square / West Side NY		1		982,984		80.8	%		85.42		N		CBD
510 Madison Avenue	Fifth/Madison Avenue NY		1		355,598		100.0	%		119.49		N		CBD
540 Madison Avenue (60% ownership)	Fifth/Madison Avenue NY		1		283,695		97.8	%		101.10		Y		CBD

			8		9,110,097		94.3	%	$	100.42

One Tower Center	East Brunswick NJ		1		412,797		26.5	%	$	30.51		N		S
510 Carnegie Center	Princeton NJ		1		234,160		100.0	%		34.24		N		S
210 Carnegie Center	Princeton NJ		1		162,372		79.3	%		33.38		N		S
206 Carnegie Center	Princeton NJ		1		161,763		100.0	%		31.87		N		S
212 Carnegie Center	Princeton NJ		1		151,547		86.9	%		36.28		N		S
214 Carnegie Center	Princeton NJ		1		150,774		67.6	%		33.35		N		S
506 Carnegie Center	Princeton NJ		1		149,312		59.0	%		34.60		N		S
508 Carnegie Center	Princeton NJ		1		134,433		100.0	%		33.17		N		S
202 Carnegie Center	Princeton NJ		1		134,381		80.3	%		38.06		N		S
(4) 804 Carnegie Center	Princeton NJ		1		130,000		100.0	%		36.25		N		S
101 Carnegie Center	Princeton NJ		1		127,237		87.3	%		33.99		N		S
504 Carnegie Center	Princeton NJ		1		121,990		100.0	%		30.83		N		S
502 Carnegie Center	Princeton NJ		1		121,460		91.3	%		36.82		N		S
701 Carnegie Center	Princeton NJ		1		120,000		100.0	%		39.28		N		S
104 Carnegie Center	Princeton NJ		1		102,830		83.6	%		33.19		N		S
105 Carnegie Center	Princeton NJ		1		69,955		56.3	%		32.32		N		S
302 Carnegie Center	Princeton NJ		1		64,926		100.0	%		34.36		N		S
211 Carnegie Center	Princeton NJ		1		47,025		100.0	%		35.30		N		S
201 Carnegie Center	Princeton NJ		—		6,500		100.0	%		32.71		N		S

			18		2,603,462		78.2	%	$	34.32

	Total New York:		26		11,713,559		90.7	%	$	87.76



San Francisco
Office
Embarcadero Center Four	CBD San Francisco CA		1		937,521		84.4	%	$	61.01		Y		CBD
Embarcadero Center One	CBD San Francisco CA		1		831,029		97.5	%		55.76		N		CBD
Embarcadero Center Two	CBD San Francisco CA		1		784,994		83.4	%		62.99		N		CBD
Embarcadero Center Three	CBD San Francisco CA		1		776,793		91.8	%		53.43		N		CBD
680 Folsom Street	CBD San Francisco CA		2		524,793		98.4	%		58.28		N		CBD
(4) 535 Mission Street	CBD San Francisco CA		1		307,235		100.0	%		71.87		N		CBD
(4) 690 Folsom Street	CBD San Francisco CA		1		26,080		100.0	%		69.75		N		CBD

			8		4,188,445		91.2	%	$	59.37

601 and 651 Gateway	South San Francisco CA		2		506,279		99.6	%	$	39.04		N		S
611 Gateway	South San Francisco CA		1		260,337		23.6	%		41.64		N		S
Mountain View Research Park	Mountain View CA		15		540,433		100.0	%		39.92		N		S
2440 West El Camino Real	Mountain View CA		1		141,392		100.0	%		56.53		N		S

453 Ravendale Drive	Mountain View CA		1		29,620		85.8	%		35.91		N		S

(4)(5) 3625-3635 Peterson Way	Santa Clara, CA		1		218,366		100.0	%		21.84		N		S
(5) North First Business Park	San Jose CA		5		190,636		100.0	%		18.77		N		S

			26		1,887,063		89.1	%	$	36.31

	Total San Francisco:		34		6,075,508		90.5	%	$	52.32

(1)	Represents signed leases for which revenue recognition has commenced in accordance with GAAP.

(2)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(3)	Upon commencement of construction of the planned repositioning, approximately 13% of this complex will be removed from the in-service portfolio.

(4)	Not included in Same Property analysis.

(5)	Property held for redevelopment.

LOGO

SECOND QUARTER 2016

IN-SERVICE PROPERTY LISTING (continued)

as of June 30, 2016


	Sub Market	Number of Buildings		Square Feet		Leased % (1)			Annualized Rental Obligations Per Leased SF (2)			Encumbered with secured debt (Y/N)	Central Business District (CBD) or Suburban (S)
Washington, DC
Office
Capital Gallery	Southwest Washington DC		1		631,029		98.6	%	$	59.02		N	CBD
500 E Street, S.W.	Southwest Washington DC		1		251,994		100.0	%		49.48		N	CBD
Metropolitan Square (51% ownership)	East End Washington DC		1		607,041		75.0	%		60.91		Y	CBD
901 New York Avenue (25% ownership)	East End Washington DC		1		539,680		92.4	%		59.07		Y	CBD
(3) 601 Massachusetts Avenue	East End Washington DC		1		478,883		86.5	%		69.59		N	CBD
Market Square North (50% ownership)	East End Washington DC		1		415,052		82.6	%		62.82		Y	CBD
2200 Pennsylvania Avenue	CBD Washington DC		1		458,831		100.0	%		87.09		N	CBD
1333 New Hampshire Avenue	CBD Washington DC		1		315,371		100.0	%		46.24		N	CBD
1330 Connecticut Avenue	CBD Washington DC		1		252,169		98.4	%		61.01		N	CBD
Sumner Square	CBD Washington DC		1		208,892		100.0	%		50.24		N	CBD
500 North Capitol Street, N.W. (30% ownership)	Capitol Hill Washington DC		1		230,860		97.5	%		66.73		Y	CBD

			11		4,389,802		92.1	%	$	62.20

South of Market	Reston VA		3		623,666		94.2	%	$	53.44		N	S
Fountain Square	Reston VA		2		518,345		93.1	%		46.15		N	S
One Freedom Square	Reston VA		1		432,581		92.2	%		47.09		N	S
Two Freedom Square	Reston VA		1		421,757		100.0	%		45.29		N	S
One and Two Discovery Square	Reston VA		2		366,990		100.0	%		44.23		N	S
One Reston Overlook	Reston VA		1		319,519		100.0	%		38.15		N	S
Reston Corporate Center	Reston VA		2		261,046		100.0	%		39.30		N	S
Democracy Tower	Reston VA		1		259,441		100.0	%		58.31		N	S
(4) Fountain Square Retail	Reston VA		1		237,209		96.8	%		52.94		N	S
Two Reston Overlook	Reston VA		1		134,615		100.0	%		37.24		N	S

			15		3,575,169		96.8	%	$	46.95

Wisconsin Place Office	Montgomery County MD		1		299,186		96.5	%	$	54.87		N	S
2600 Tower Oaks Boulevard	Montgomery County MD		1		179,369		44.1	%		33.74		N	S
New Dominion Technology Park—Building Two	Herndon VA		1		257,400		100.0	%		39.34		N	S
New Dominion Technology Park—Building One	Herndon VA		1		235,201		100.0	%		33.60		Y	S
Kingstowne Two	Springfield VA		1		156,251		93.7	%		41.74		N	S
Kingstowne One	Springfield VA		1		151,483		75.6	%		40.23		N	S
7601 Boston Boulevard	Springfield VA		1		114,028		100.0	%		18.60		N	S
7435 Boston Boulevard	Springfield VA		1		103,557		76.2	%		21.87		N	S
8000 Grainger Court	Springfield VA		1		88,775		37.6	%		23.64		N	S
(4) Kingstowne Retail	Springfield VA		1		88,288		100.0	%		35.98		N	S
7500 Boston Boulevard	Springfield VA		1		79,971		100.0	%		19.64		N	S
7501 Boston Boulevard	Springfield VA		1		75,756		100.0	%		28.60		N	S
7450 Boston Boulevard	Springfield VA		1		62,402		0.0	%		—		N	S
7374 Boston Boulevard	Springfield VA		1		57,321		100.0	%		17.90		N	S
8000 Corporate Court	Springfield VA		1		52,539		100.0	%		13.79		N	S
7451 Boston Boulevard	Springfield VA		1		45,615		67.4	%		26.03		N	S
7300 Boston Boulevard	Springfield VA		1		32,000		100.0	%		23.64		N	S
7375 Boston Boulevard	Springfield VA		1		26,865		79.2	%		28.62		N	S
(3) Annapolis Junction Building Seven (50% ownership)	Anne Arundel County MD		1		127,229		100.0	%		31.79		Y	S
(3) Annapolis Junction Building Eight (50% ownership)	Anne Arundel County MD		1		125,685		0.0	%		—		Y	S
Annapolis Junction Building Six (50% ownership)	Anne Arundel County MD		1		119,339		48.9	%		29.74		Y	S
Annapolis Junction Building One (50% ownership)	Anne Arundel County MD		1		117,599		50.8	%		128.74		Y	S

			22		2,595,859		78.2	%	$	37.52

	Total Washington Office:		48		10,560,830		90.3	%	$	51.40

Residential
The Avant at Reston Town Center (359 units)	Reston VA		1		355,347							N	S

	Total Washington Residential:		1		355,347

	Total Washington, DC:		49		10,916,177

	Total In-Service Properties:		160		42,769,956		90.8	%(5)	$	61.55	(5)

(1)	Represents signed leases for which revenue recognition has commenced in accordance with GAAP.

(2)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(3)	Not included in Same Property analysis.

(4)	This is a retail property.

(5)	Excludes Hotel and Residential properties. For disclosures relating to the Company’s Hotel and Residential properties, see page 38.

LOGO

SECOND QUARTER 2016

OCCUPANCY BY LOCATION

Total In-Service Properties ⁽¹⁾


	CBD						Suburban						Total
Location	30-Jun-16			30-Jun-15			30-Jun-16			30-Jun-15			30-Jun-16			30-Jun-15
Boston		92.4	%		90.3	%		89.4	%		91.3	%		91.3	%		90.6	%
New York		94.3	%		94.5	%		78.2	%		75.8	%		90.7	%		90.5	%
San Francisco		91.2	%		95.8	%		89.1	%		77.9	%		90.5	%		89.2	%
Washington, DC		92.1	%		95.5	%		89.0	%		92.2	%		90.3	%		93.6	%

Total Portfolio		92.8	%		93.4	%		87.4	%		87.2	%		90.8	%		91.1	%

Same Property Portfolio^{(1) (2)}


	CBD						Suburban						Total
Location	30-Jun-16			30-Jun-15			30-Jun-16			30-Jun-15			30-Jun-16			30-Jun-15
Boston		92.4	%		90.0	%		89.3	%		91.3	%		91.3	%		90.5	%
New York		94.3	%		94.5	%		77.1	%		75.8	%		90.6	%		90.5	%
San Francisco		90.4	%		95.8	%		87.7	%		97.0	%		89.6	%		96.1	%
Washington, DC		92.7	%		95.1	%		90.7	%		92.2	%		91.5	%		93.4	%

Total Portfolio		92.8	%		93.3	%		87.6	%		89.7	%		90.9	%		92.0	%

(1)	Represents signed leases for which revenue recognition has commenced in accordance with GAAP. Includes 100% of joint venture properties. Does not include residential and hotel properties.

(2)	For disclosures related to the Company’s definition of Same Properties, see page 49.

LOGO

SECOND QUARTER 2016

TOP 20 TENANTS LISTING AND PORTFOLIO TENANT DIVERSIFICATION


*TOP 20 TENANTS (1)*

		% of BXP’s Share of
	Tenant	Combined Rental Obligations
1.	Citibank		3.14	%
2.	US Government		2.90	%
3.	Arnold & Porter		2.22	%
4.	Biogen		2.04	%
5.	Shearman & Sterling		1.91	%
6.	Ropes & Gray		1.64	%
7.	Kirkland & Ellis		1.49	%
8.	O’Melveny & Myers		1.39	%
9.	Wellington Management		1.31	%
10.	Bank of America		1.29	%
11.	Weil Gotshal Manges		1.28	%
12.	Morgan Lewis Bockius		1.23	%
13.	Microsoft		1.10	%
14.	Google		1.10	%
15.	Aramis (Estee Lauder)		1.05	%
16.	Kaye Scholer		0.98	%
17.	Mass Financial Services		0.90	%
18.	Morrison Foerster		0.89	%
19.	Hunton & Williams		0.87	%
20.	Smithsonian Institution		0.82	%

	BXP’s Share of Combined Rental Obligations		29.54	%

	BXP’s Share of Combined Square Feet		23.89	%

NOTABLE SIGNED DEALS (2)


Tenant	Property	Sq. Ft.
salesforce.com	Salesforce Tower		732,000
Putnam Investments	100 Federal Street		249,000

TENANT DIVERSIFICATION (1)

LOGO

(1)	Percentages are based on BXP’s Share of Combined Annualized Rental Obligations. For disclosures relating to the Company’s definition of Annualized Rental Obligations and BXP’s Share of Combined Rental Obligations, see pages 47-49.

(2)	Represents leases signed with occupancy commencing in the future.

LOGO

SECOND QUARTER 2016

LEASE EXPIRATIONS (1) (2) (3)

IN-SERVICE OFFICE PROPERTIES


							Annualized		Annualized
			Current Annualized		Current Annualized		Rental Obligations		Rental Obligations
	Rentable Square		Rental Obligations		Rental Obligations		Under		Under
Year of Lease	Footage Subject to		Under		Under		Expiring Leases		Expiring Leases with		Percentage of
Expiration	Expiring Leases		Expiring Leases		Expiring Leases p.s.f.		with future step-ups		future step-ups - p.s.f.		Total Square Feet
2016		1,213,115	$	64,827,021	$	53.44	$	64,899,754	$	53.50		3.04	%(4)
2017		2,782,754		160,960,512		57.84		163,182,245		58.64		6.96	%
2018		1,573,839		93,150,112		59.19		94,285,362		59.91		3.94	%
2019		3,273,942		170,649,511		52.12		175,851,194		53.71		8.19	%
2020		4,187,919		266,979,458		63.75		277,042,040		66.15		10.48	%
2021		3,340,264		168,120,460		50.33		183,794,429		55.02		8.36	%
2022		3,890,168		218,947,672		56.28		241,716,115		62.14		9.73	%
2023		1,379,181		72,713,336		52.72		84,820,351		61.50		3.45	%
2024		2,662,016		152,872,896		57.43		171,829,510		64.55		6.66	%
2025		2,094,837		122,083,907		58.28		139,194,292		66.45		5.24	%
Thereafter		9,435,884		671,442,828		71.16		847,852,853		89.85		23.61	%

IN-SERVICE RETAIL PROPERTIES


							Annualized		Annualized
			Current Annualized		Current Annualized		Rental Obligations		Rental Obligations
	Rentable Square		Rental Obligations		Rental Obligations		Under		Under
Year of Lease	Footage Subject to		Under		Under		Expiring Leases		Expiring Leases with		Percentage of
Expiration	Expiring Leases		Expiring Leases		Expiring Leases p.s.f.		with future step-ups		future step-ups - p.s.f.		Total Square Feet
2016		198,262	$	12,295,498	$	62.02	$	12,307,550	$	62.08		9.79	%
2017		162,558		15,461,352		95.11		15,521,111		95.48		8.03	%
2018		239,022		21,377,328		89.44		22,273,713		93.19		11.80	%
2019		90,192		6,437,202		71.37		6,574,881		72.90		4.45	%
2020		186,935		11,888,424		63.60		12,314,014		65.87		9.23	%
2021		151,292		20,784,591		137.38		22,569,716		149.18		7.47	%
2022		200,362		18,253,393		91.10		19,071,632		95.19		9.89	%
2023		168,386		14,643,660		86.96		16,315,868		96.90		8.31	%
2024		112,560		9,800,682		87.07		11,616,674		103.20		5.56	%
2025		130,667		8,604,287		65.85		9,650,348		73.85		6.45	%
Thereafter		385,178		33,122,673		85.99		39,741,900		103.18		19.02	%

TOTAL IN-SERVICE PROPERTIES


							Annualized		Annualized
			Current Annualized		Current Annualized		Rental Obligations		Rental Obligations
	Rentable Square		Rental Obligations		Rental Obligations		Under		Under
Year of Lease	Footage Subject to		Under		Under		Expiring Leases		Expiring Leases with		Percentage of
Expiration	Expiring Leases		Expiring Leases		Expiring Leases p.s.f.		with future step-ups		future step-ups - p.s.f.		Total Square Feet
2016		1,411,377	$	77,122,519	$	54.64	$	77,207,305	$	54.70		3.36	%(4)
2017		2,945,312		176,421,863		59.90		178,703,356		60.67		7.01	%
2018		1,812,861		114,527,440		63.17		116,559,075		64.30		4.32	%
2019		3,364,134		177,086,713		52.64		182,426,075		54.23		8.01	%
2020		4,374,854		278,867,881		63.74		289,356,054		66.14		10.42	%
2021		3,491,556		188,905,050		54.10		206,364,145		59.10		8.31	%
2022		4,090,530		237,201,065		57.99		260,787,747		63.75		9.74	%
2023		1,547,567		87,356,996		56.45		101,136,219		65.35		3.69	%
2024		2,774,576		162,673,578		58.63		183,446,184		66.12		6.61	%
2025		2,225,504		130,688,194		58.72		148,844,640		66.88		5.30	%
Thereafter		9,821,062		704,565,501		71.74		887,594,754		90.38		23.39	%

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties. Does not include residential units and hotel.

(3)	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires.

(4)	Includes square feet expiring on the last day of the current quarter.

LOGO

SECOND QUARTER 2016

IN-SERVICE BOSTON REGION PROPERTIES

Lease Expirations - Boston Region (1) (2) (3)


*OFFICE*
							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Year of Lease	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
Expiration	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
2016		416,428	$	15,796,295	$	37.93	$	15,865,738	$	38.10	(4)
2017		734,060		32,616,492		44.43		32,765,705		44.64
2018		447,028		18,972,130		42.44		19,410,221		43.42
2019		1,109,476		53,214,033		47.96		54,121,768		48.78
2020		407,190		19,033,567		46.74		19,897,919		48.87
2021		1,024,918		40,176,947		39.20		41,893,009		40.87
2022		1,570,620		75,352,234		47.98		79,361,158		50.53
2023		528,479		26,162,189		49.50		30,073,087		56.90
2024		538,692		24,367,589		45.23		28,009,712		52.00
2025		1,094,575		61,644,411		56.32		69,593,100		63.58
Thereafter		3,661,757		205,820,294		56.21		237,265,869		64.80


*RETAIL*
							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Year of Lease	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
Expiration	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
2016		44,186	$	3,027,567	$	68.52	$	3,034,983	$	68.69
2017		52,695		4,297,775		81.56		4,323,221		82.04
2018		140,449		6,578,670		46.84		6,604,030		47.02
2019		11,787		2,008,065		170.36		2,032,178		172.41
2020		93,309		6,027,474		64.60		6,225,013		66.71
2021		38,052		2,696,243		70.86		2,917,761		76.68
2022		94,118		5,857,244		62.23		5,479,656		58.22
2023		79,937		7,687,412		96.17		8,265,595		103.40
2024		70,570		4,191,754		59.40		4,588,490		65.02
2025		30,224		3,701,533		122.47		4,196,338		138.84
Thereafter		141,914		8,558,638		60.31		9,573,184		67.46


*TOTAL PROPERTY TYPES*
							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Year of Lease	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
Expiration	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
2016		460,614	$	18,823,862	$	40.87	$	18,900,720	$	41.03	(4)
2017		786,755		36,914,267		46.92		37,088,927		47.14
2018		587,477		25,550,799		43.49		26,014,251		44.28
2019		1,121,263		55,222,098		49.25		56,153,946		50.08
2020		500,499		25,061,041		50.07		26,122,932		52.19
2021		1,062,970		42,873,190		40.33		44,810,770		42.16
2022		1,664,738		81,209,479		48.78		84,840,814		50.96
2023		608,416		33,849,601		55.64		38,338,681		63.01
2024		609,262		28,559,343		46.88		32,598,202		53.50
2025		1,124,799		65,345,944		58.10		73,789,438		65.60
Thereafter		3,803,671		214,378,932		56.36		246,839,054		64.89

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties. Does not include residential units and hotel.

(3)	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires.

(4)	Includes square feet expiring on the last day of the current quarter.

LOGO

SECOND QUARTER 2016

IN-SERVICE BOSTON REGION PROPERTIES

Quarterly Lease Expirations - Boston Region (1) (2) (3)


*OFFICE*
							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Lease Expiration	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
by Quarter	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
Q1 2016		—	$	—	$	—	$	—	$	—
Q2 2016		154,516		5,014,731		32.45		5,014,731		32.45	(4)
Q3 2016		157,404		6,644,355		42.21		6,649,828		42.25
Q4 2016		104,508		4,137,209		39.59		4,201,179		40.20

Total 2016		416,428	$	15,796,295	$	37.93	$	15,865,738	$	38.10

Q1 2017		100,041	$	4,254,835	$	42.53	$	4,254,835	$	42.53
Q2 2017		200,633		9,082,519		45.27		9,159,243		45.65
Q3 2017		67,379		3,060,413		45.42		3,084,180		45.77
Q4 2017		366,007		16,218,725		44.31		16,267,448		44.45

Total 2017		734,060	$	32,616,492	$	44.43	$	32,765,705	$	44.64


*RETAIL*
							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Lease Expiration	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
by Quarter	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
Q1 2016		—	$	—	$	—	$	—	$	—
Q2 2016		—		—		—		—		—
Q3 2016		39,732		2,406,542		60.57		2,413,958		60.76
Q4 2016		4,454		621,024		139.43		621,024		139.43

Total 2016		44,186	$	3,027,567	$	68.52	$	3,034,983	$	68.69

Q1 2017		10,545	$	1,282,723	$	121.64	$	1,286,343	$	121.99
Q2 2017		28,502		1,814,486		63.66		1,832,486		64.29
Q3 2017		3,386		473,338		139.79		474,893		140.25
Q4 2017		10,262		727,228		70.87		729,500		71.09

Total 2017		52,695	$	4,297,775	$	81.56	$	4,323,221	$	82.04


*TOTAL PROPERTY TYPES*
							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Lease Expiration	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
by Quarter	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
Q1 2016		—	$	—	$	—	$	—	$	—
Q2 2016		154,516		5,014,731		32.45		5,014,731		32.45	(4)
Q3 2016		197,136		9,050,897		45.91		9,063,786		45.98
Q4 2016		108,962		4,758,234		43.67		4,822,203		44.26

Total 2016		460,614	$	18,823,862	$	40.87	$	18,900,720	$	41.03

Q1 2017		110,586	$	5,537,558	$	50.07	$	5,541,178	$	50.11
Q2 2017		229,135		10,897,005		47.56		10,991,729		47.97
Q3 2017		70,765		3,533,751		49.94		3,559,073		50.29
Q4 2017		376,269		16,945,953		45.04		16,996,948		45.17

Total 2017		786,755	$	36,914,267	$	46.92	$	37,088,927	$	47.14

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties. Does not include residential units and hotel.

(3)	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires.

(4)	Includes square feet expiring on the last day of the quarter.

LOGO

SECOND QUARTER 2016

IN-SERVICE NEW YORK REGION PROPERTIES

Lease Expirations - New York Region (1) (2) (3)


*OFFICE*
							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Year of Lease	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
Expiration	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
2016		420,359	$	28,465,496	$	67.72	$	28,679,656	$	68.23	(4)
2017		816,723		69,596,439		85.21		69,606,409		85.23
2018		529,879		42,898,735		80.96		42,356,164		79.94
2019		488,304		38,678,251		79.21		38,879,394		79.62
2020		1,862,193		152,136,877		81.70		156,374,969		83.97
2021		386,304		33,416,818		86.50		35,019,674		90.65
2022		911,605		79,320,606		87.01		85,101,914		93.35
2023		88,524		7,908,741		89.34		8,634,935		97.54
2024		1,045,255		72,149,523		69.03		78,672,368		75.27
2025		413,883		33,406,662		80.72		36,434,548		88.03
Thereafter		3,336,708		303,525,468		90.97		398,634,218		119.47

*RETAIL*
							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Year of Lease	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
Expiration	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
2016		98,065	$	6,177,096	$	62.99	$	6,177,095	$	62.99
2017		33,027		6,679,649		202.25		6,679,649		202.25
2018		8,114		8,772,298		1,081.13		9,549,453		1,176.91
2019		—		—		—		—		—
2020		3,452		253,056		73.31		253,056		73.31
2021		27,201		12,511,344		459.96		13,707,852		503.95
2022		58,093		9,907,211		170.54		10,841,209		186.62
2023		2,850		2,762,325		969.24		3,455,985		1,212.63
2024		11,395		3,945,257		346.23		5,077,277		445.57
2025		1,872		653,966		349.34		729,902		389.90
Thereafter		88,417		17,553,595		198.53		21,561,287		243.86

*TOTAL PROPERTY TYPES*
							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Year of Lease	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
Expiration	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
2016		518,424	$	34,642,592	$	66.82	$	34,856,751	$	67.24	(4)
2017		849,750		76,276,088		89.76		76,286,058		89.77
2018		537,993		51,671,033		96.04		51,905,617		96.48
2019		488,304		38,678,251		79.21		38,879,394		79.62
2020		1,865,645		152,389,933		81.68		156,628,025		83.95
2021		413,505		45,928,162		111.07		48,727,527		117.84
2022		969,698		89,227,818		92.02		95,943,123		98.94
2023		91,374		10,671,066		116.78		12,090,920		132.32
2024		1,056,650		76,094,781		72.02		83,749,644		79.26
2025		415,755		34,060,628		81.92		37,164,450		89.39
Thereafter		3,425,125		321,079,063		93.74		420,195,505		122.68

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties.

(3)	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires.

(4)	Includes square feet expiring on the last day of the current quarter.

LOGO

SECOND QUARTER 2016

IN-SERVICE NEW YORK REGION PROPERTIES

Quarterly Lease Expirations - New York Region (1) (2) (3)


*OFFICE*
							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Lease Expiration	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
by Quarter	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
Q1 2016		—	$	—	$	—	$	—	$	—
Q2 2016		81,066		7,512,637		92.67		7,512,637		92.67	(4)
Q3 2016		270,360		17,431,374		64.47		17,645,534		65.27
Q4 2016		68,933		3,521,485		51.09		3,521,485		51.09

Total 2016		420,359	$	28,465,496	$	67.72	$	28,679,656	$	68.23

Q1 2017		77,105	$	5,405,797	$	70.11	$	5,405,797	$	70.11
Q2 2017		169,464		16,326,027		96.34		16,326,027		96.34
Q3 2017		527,940		44,643,906		84.56		44,643,906		84.56
Q4 2017		42,214		3,220,710		76.29		3,230,680		76.53

Total 2017		816,723	$	69,596,439	$	85.21	$	69,606,409	$	85.23


*RETAIL*
							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Lease Expiration	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
by Quarter	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
Q1 2016		—	$	—	$	—	$	—	$	—
Q2 2016		—		—		—		—		—
Q3 2016		94,794		5,833,357		61.54		5,833,356		61.54
Q4 2016		3,271		343,739		105.09		343,739		105.09

Total 2016		98,065	$	6,177,096	$	62.99	$	6,177,095	$	62.99

Q1 2017		6,342	$	4,103,330	$	647.01	$	4,103,330	$	647.01
Q2 2017		626		180,160		287.79		180,160		287.79
Q3 2017		26,059		2,396,159		91.95		2,396,159		91.95
Q4 2017		—		—		—		—		—

Total 2017		33,027	$	6,679,649	$	202.25	$	6,679,649	$	202.25


*TOTAL PROPERTY TYPES*
							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Lease Expiration	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
by Quarter	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
Q1 2016		—	$	—	$	—	$	—	$	—
Q2 2016		81,066		7,512,637		92.67		7,512,637		92.67	(4)
Q3 2016		365,154		23,264,731		63.71		23,478,890		64.30
Q4 2016		72,204		3,865,225		53.53		3,865,225		53.53

Total 2016		518,424	$	34,642,592	$	66.82	$	34,856,751	$	67.24

Q1 2017		83,447	$	9,509,127	$	113.95	$	9,509,127	$	113.95
Q2 2017		170,090		16,506,186		97.04		16,506,186		97.04
Q3 2017		553,999		47,040,065		84.91		47,040,065		84.91
Q4 2017		42,214		3,220,710		76.29		3,230,680		76.53

Total 2017		849,750	$	76,276,088	$	89.76	$	76,286,058	$	89.77

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties.

(3)	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires.

(4)	Includes square feet expiring on the last day of the quarter.

LOGO

SECOND QUARTER 2016

IN-SERVICE SAN FRANCISCO REGION PROPERTIES

Lease Expirations - San Francisco Region (1) (2) (3)


*OFFICE*
							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Year of Lease	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
Expiration	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
2016		133,883	$	6,090,040	$	45.49	$	5,845,909	$	43.66
2017		614,260		28,124,425		45.79		29,973,750		48.80
2018		195,064		10,309,557		52.85		10,646,405		54.58
2019		705,842		32,983,643		46.73		35,124,908		49.76
2020		625,869		39,219,416		62.66		40,670,332		64.98
2021		701,503		30,518,962		43.51		35,711,888		50.91
2022		680,937		32,196,788		47.28		40,250,046		59.11
2023		256,825		14,969,834		58.29		18,381,420		71.57
2024		445,553		24,398,998		54.76		28,175,562		63.24
2025		126,939		7,556,620		59.53		9,515,291		74.96
Thereafter		681,114		43,614,379		64.03		56,519,708		82.98

*RETAIL*
							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Year of Lease	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
Expiration	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
2016		28,500	$	1,335,367	$	46.85	$	1,335,367	$	46.85
2017		15,277		1,047,404		68.56		1,057,417		69.22
2018		34,007		2,053,388		60.38		2,084,099		61.28
2019		12,118		739,556		61.03		770,631		63.59
2020		35,924		2,212,689		61.59		2,348,273		65.37
2021		18,918		1,228,284		64.93		1,297,733		68.60
2022		27,445		1,084,951		39.53		1,159,976		42.27
2023		29,753		1,657,862		55.72		1,767,110		59.39
2024		8,545		553,103		64.73		648,935		75.94
2025		21,461		1,329,557		61.95		1,527,673		71.18
Thereafter		29,117		1,872,192		64.30		2,619,763		89.97

*TOTAL PROPERTY TYPES*
							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Year of Lease	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
Expiration	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
2016		162,383	$	7,425,407	$	45.73	$	7,181,276	$	44.22
2017		629,537		29,171,829		46.34		31,031,167		49.29
2018		229,071		12,362,945		53.97		12,730,503		55.57
2019		717,960		33,723,199		46.97		35,895,539		50.00
2020		661,793		41,432,105		62.61		43,018,605		65.00
2021		720,421		31,747,246		44.07		37,009,621		51.37
2022		708,382		33,281,740		46.98		41,410,022		58.46
2023		286,578		16,627,696		58.02		20,148,530		70.31
2024		454,098		24,952,101		54.95		28,824,497		63.48
2025		148,400		8,886,177		59.88		11,042,964		74.41
Thereafter		710,231		45,486,571		64.04		59,139,471		83.27

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties.

(3)	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires.

LOGO

SECOND QUARTER 2016

IN-SERVICE SAN FRANCISCO REGION PROPERTIES

Quarterly Lease Expirations - San Francisco Region (1) (2) (3)


*OFFICE*
Lease Expiration by Quarter	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
Q1 2016		—	$	—	$	—	$	—	$	—
Q2 2016		—		—		—		—		—
Q3 2016		29,223		1,622,007		55.50		1,622,007		55.50
Q4 2016		104,660		4,468,033		42.69		4,223,902		40.36

Total 2016		133,883	$	6,090,040	$	45.49	$	5,845,909	$	43.66

Q1 2017		220,650	$	9,683,706	$	43.89	$	9,685,845	$	43.90
Q2 2017		111,739		4,930,118		44.12		5,045,859		45.16
Q3 2017		220,989		10,912,706		49.38		12,333,777		55.81
Q4 2017		60,882		2,597,895		42.67		2,908,270		47.77

Total 2017		614,260	$	28,124,425	$	45.79	$	29,973,750	$	48.80


*RETAIL*
Lease Expiration by Quarter	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
Q1 2016		—	$	—	$	—	$	—	$	—
Q2 2016		—		—		—		—		—
Q3 2016		7,170		336,938		46.99		336,938		46.99
Q4 2016		21,330		998,429		46.81		998,429		46.81

Total 2016		28,500	$	1,335,367	$	46.85	$	1,335,367	$	46.85

Q1 2017		30	$	14,400	$	480.00	$	14,400	$	480.00
Q2 2017		130		26,046		200.35		26,046		200.35
Q3 2017		8,793		627,750		71.39		635,805		72.31
Q4 2017		6,324		379,208		59.96		381,166		60.27

Total 2017		15,277	$	1,047,404	$	68.56	$	1,057,417	$	69.22


*TOTAL PROPERTY TYPES*
Lease Expiration by Quarter	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
Q1 2016		—	$	—	$	—	$	—	$	—
Q2 2016		—		—		—		—		—
Q3 2016		36,393		1,958,945		53.83		1,958,945		53.83
Q4 2016		125,990		5,466,461		43.39		5,222,330		41.45

Total 2016		162,383	$	7,425,407	$	45.73	$	7,181,276	$	44.22

Q1 2017		220,680	$	9,698,106	$	43.95	$	9,700,245	$	43.96
Q2 2017		111,869		4,956,163		44.30		5,071,904		45.34
Q3 2017		229,782		11,540,456		50.22		12,969,582		56.44
Q4 2017		67,206		2,977,102		44.30		3,289,436		48.95

Total 2017		629,537	$	29,171,829	$	46.34	$	31,031,167	$	49.29

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties.

(3)	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires.

LOGO

SECOND QUARTER 2016

IN-SERVICE WASHINGTON, DC REGION PROPERTIES

Lease Expirations - Washington, DC Region (1) (2) (3)


*OFFICE*
Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2016		242,445	$	14,475,191	$	59.71	$	14,508,452	$	59.84	(4)(5)
2017		617,711		30,623,156		49.58		30,836,380		49.92	(5)
2018		401,868		20,969,691		52.18		21,872,572		54.43
2019		970,320		45,773,583		47.17		47,725,124		49.18
2020		1,292,667		56,589,598		43.78		60,098,820		46.49
2021		1,227,539		64,007,733		52.14		71,169,857		57.98
2022		727,006		32,078,043		44.12		37,002,997		50.90
2023		505,353		23,672,572		46.84		27,730,909		54.87
2024		632,516		31,956,786		50.52		36,971,869		58.45
2025		459,440		19,476,214		42.39		23,651,355		51.48
Thereafter		1,756,305		118,482,687		67.46		155,433,058		88.50

*RETAIL*
Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2016		27,511	$	1,755,468	$	63.81	$	1,760,105	$	63.98
2017		61,559		3,436,524		55.82		3,460,824		56.22
2018		56,452		3,972,972		70.38		4,036,131		71.50
2019		66,287		3,689,582		55.66		3,772,072		56.91
2020		54,250		3,395,204		62.58		3,487,672		64.29
2021		67,121		4,348,719		64.79		4,646,370		69.22
2022		20,706		1,403,986		67.81		1,590,791		76.83
2023		55,846		2,536,062		45.41		2,827,178		50.62
2024		22,050		1,110,568		50.37		1,301,973		59.05
2025		77,110		2,919,231		37.86		3,196,435		41.45
Thereafter		125,730		5,138,248		40.87		5,987,665		47.62

*TOTAL PROPERTY TYPES*
Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2016		269,956	$	16,230,659	$	60.12	$	16,268,557	$	60.26	(4)
2017		679,270		34,059,680		50.14		34,297,205		50.49
2018		458,320		24,942,663		54.42		25,908,704		56.53
2019		1,036,607		49,463,165		47.72		51,497,196		49.68
2020		1,346,917		59,984,802		44.53		63,586,492		47.21
2021		1,294,660		68,356,452		52.80		75,816,228		58.56
2022		747,712		33,482,029		44.78		38,593,788		51.62
2023		561,199		26,208,633		46.70		30,558,087		54.45
2024		654,566		33,067,354		50.52		38,273,841		58.47
2025		536,550		22,395,445		41.74		26,847,789		50.04
Thereafter		1,882,035		123,620,935		65.68		161,420,724		85.77

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties. Does not include residential units.

(3)	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires.

(4)	Includes square feet expiring on the last day of the current quarter.

(5)	Includes 50,185 and 9,570 square feet of Sensitive Compartmented Information Facility (SCIF) space in 2016 and 2017, respectively. Excluding the SCIF space, the current and future expiring rental rates per square foot would be $41.25 and $41.42 and $48.47 and $48.80, respectively.

LOGO

SECOND QUARTER 2016

IN-SERVICE WASHINGTON, DC REGION PROPERTIES

Quarterly Lease Expirations - Washington, DC Region (1) (2) (3)


*OFFICE*
							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Lease Expiration	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
by Quarter	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
Q1 2016		—	$	—	$	—	$	—	$	—
Q2 2016		40,004		2,279,856		56.99		2,279,856		56.99	(4)(5)
Q3 2016		76,644		6,430,089		83.90		6,437,671		83.99	(5)
Q4 2016		125,797		5,765,246		45.83		5,790,925		46.03	(5)

Total 2016		242,445	$	14,475,191	$	59.71	$	14,508,452	$	59.84

Q1 2017		156,499	$	7,110,425	$	45.43	$	7,139,291	$	45.62
Q2 2017		75,533		4,398,066		58.23		4,432,018		58.68	(5)
Q3 2017		288,465		13,819,263		47.91		13,860,189		48.05
Q4 2017		97,214		5,295,402		54.47		5,404,882		55.60

Total 2017		617,711	$	30,623,156	$	49.58	$	30,836,380	$	49.92


*RETAIL*
							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Lease Expiration	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
by Quarter	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
Q1 2016		—	$	—	$	—	$	—	$	—
Q2 2016		—		—		—		—		—
Q3 2016		5,413		427,809		79.03		427,809		79.03
Q4 2016		22,098		1,327,659		60.08		1,332,296		60.29

Total 2016		27,511	$	1,755,468	$	63.81	$	1,760,105	$	63.98

Q1 2017		26,393	$	1,578,067	$	59.79	$	1,578,067	$	59.79
Q2 2017		12,974		491,190		37.86		491,190		37.86
Q3 2017		6,842		446,730		65.29		446,730		65.29
Q4 2017		15,350		920,537		59.97		944,837		61.55

Total 2017		61,559	$	3,436,524	$	55.82	$	3,460,824	$	56.22


*TOTAL PROPERTY TYPES*
							Annualized
	Rentable Square		Current Annualized		Per		Rental Obligations Under		Per
Lease Expiration	Footage Subject to		Rental Obligations Under		Square		Expiring Leases		Square
by Quarter	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
Q1 2016		—	$	—	$	—	$	—	$	—
Q2 2016		40,004		2,279,856		56.99		2,279,856		56.99	(4)
Q3 2016		82,057		6,857,898		83.57		6,865,480		83.67
Q4 2016		147,895		7,092,904		47.96		7,123,221		48.16

Total 2016		269,956	$	16,230,659	$	60.12	$	16,268,557	$	60.26

Q1 2017		182,892	$	8,688,492	$	47.51	$	8,717,359	$	47.66
Q2 2017		88,507		4,889,256		55.24		4,923,208		55.63
Q3 2017		295,307		14,265,993		48.31		14,306,919		48.45
Q4 2017		112,564		6,215,939		55.22		6,349,719		56.41

Total 2017		679,270	$	34,059,680	$	50.14	$	34,297,205	$	50.49

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties. Does not include residential units.

(3)	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires.

(4)	Includes square feet expiring on the last day of the current quarter.

(5)

Includes 5,979, 36,144, 8,062, and 9,570 square feet of Sensitive Compartmented Information Facility (SCIF) space in Q2 2016, Q3 2016, Q4 2016, and Q2 2017, respectively. Excluding the SCIF space, the current and future expiring rental rates per square foot would be $45.60 and $45.60, $39.41 and $39.60, $40.63 and $40.85, and $49.26 and $49.61, respectively.

LOGO

SECOND QUARTER 2016

CBD PROPERTIES

Lease Expirations (1) (2) (3)


	Boston											San Francisco
Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot			Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2016		143,421	$	8,886,470	$	61.96	$	8,899,359	$	62.05	(4)		111,192	$	5,849,625	$	52.61	$	5,605,494	$	50.41
2017		382,794		23,071,127		60.27		23,206,336		60.62			372,003		21,818,268		58.65		23,455,658		63.05
2018		318,716		16,595,809		52.07		16,857,037		52.89			170,028		10,163,936		59.78		10,418,236		61.27
2019		652,962		36,969,314		56.62		37,445,418		57.35			248,131		14,147,559		57.02		14,761,968		59.49
2020		313,460		18,827,978		60.07		19,515,970		62.26			586,146		38,025,701		64.87		39,318,263		67.08
2021		400,355		22,355,023		55.84		23,118,951		57.75			403,365		24,074,615		59.68		28,243,232		70.02
2022		969,080		55,401,601		57.17		58,738,724		60.61			333,523		17,706,995		53.09		22,303,355		66.87
2023		412,150		27,531,826		66.80		30,724,921		74.55			245,921		14,488,684		58.92		17,305,876		70.37
2024		285,278		16,454,590		57.68		18,444,961		64.66			429,586		23,996,133		55.86		27,613,505		64.28
2025		684,479		44,238,481		64.63		50,554,085		73.86			142,758		8,692,462		60.89		10,790,801		75.59
Thereafter		3,341,494		199,590,492		59.73		230,019,320		68.84			710,231		45,486,571		64.04		59,139,471		83.27

	New York											Washington, DC
Year of Lease Expiration	Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot			Rentable Square Footage Subject to Expiring Leases		Current Annualized Rental Obligations Under Expiring Leases		Per Square Foot		Annualized Rental Obligations Under Expiring Leases with future step-ups		Per Square Foot
2016		367,556	$	29,852,854	$	81.22	$	29,852,853	$	81.22	(4)		60,473	$	2,981,138	$	49.30	$	2,995,231	$	49.53	(4)
2017		685,930		70,245,724		102.41		70,245,724		102.41			371,886		19,040,541		51.20		19,081,458		51.31
2018		320,479		44,317,776		138.29		44,394,254		138.52			116,353		6,827,231		58.68		7,130,559		61.28
2019		331,971		32,873,075		99.02		32,957,996		99.28			406,976		26,515,299		65.15		27,997,219		68.79
2020		1,558,077		141,890,643		91.07		145,526,190		93.40			449,893		24,663,428		54.82		26,456,594		58.81
2021		311,885		42,568,815		136.49		45,190,946		144.90			544,917		35,445,169		65.05		39,250,804		72.03
2022		907,379		87,184,283		96.08		93,712,474		103.28			89,997		5,315,044		59.06		5,935,888		65.96
2023		83,075		10,406,869		125.27		11,810,125		142.16			46,648		2,847,334		61.04		3,471,497		74.42
2024		672,248		62,729,543		93.31		69,603,696		103.54			193,400		12,614,112		65.22		14,658,060		75.79
2025		282,008		29,228,892		103.65		31,848,150		112.93			82,103		4,158,737		50.65		5,061,410		61.65
Thereafter		3,096,717		309,881,077		100.07		407,752,399		131.67			1,605,396		111,615,902		69.53		146,690,207		91.37

(1)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(2)	Includes 100% of joint venture properties. Does not include residential units and hotel.

(3)	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires.

(4)	Includes square feet expiring on the last day of the current quarter.

LOGO

SECOND QUARTER 2016

SUBURBAN PROPERTIES

Lease Expirations (1) (2) (3)


	Boston											San Francisco
							Annualized											Annualized
			Current Annualized				Rental Obligations							Current Annualized				Rental Obligations
	Rentable Square		Rental Obligations		Per		Under		Per			Rentable Square		Rental Obligations		Per		Under		Per
Year of Lease	Footage Subject to		Under		Square		Expiring Leases		Square			Footage Subject to		Under		Square		Expiring Leases		Square
Expiration	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot			Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
2016		317,193	$	9,937,392	$	31.33	$	10,001,362	$	31.53	(4)		51,191	$	1,575,781	$	30.78	$	1,575,781	$	30.78
2017		403,961		13,843,140		34.27		13,882,591		34.37			257,534		7,353,561		28.55		7,575,509		29.42
2018		268,761		8,954,991		33.32		9,157,214		34.07			59,043		2,199,009		37.24		2,312,268		39.16
2019		468,301		18,252,784		38.98		18,708,529		39.95			469,829		19,575,640		41.67		21,133,571		44.98
2020		187,039		6,233,063		33.32		6,606,962		35.32			75,647		3,406,404		45.03		3,700,342		48.92
2021		662,615		20,518,167		30.97		21,691,819		32.74			317,056		7,672,631		24.20		8,766,389		27.65
2022		695,658		25,807,877		37.10		26,102,090		37.52			374,859		15,574,745		41.55		19,106,667		50.97
2023		196,266		6,317,775		32.19		7,613,760		38.79			40,657		2,139,012		52.61		2,842,655		69.92
2024		323,984		12,104,753		37.36		14,153,240		43.68			24,512		955,968		39.00		1,210,992		49.40
2025		440,320		21,107,462		47.94		23,235,352		52.77			5,642		193,716		34.33		252,162		44.69
Thereafter		462,177		14,788,440		32.00		16,819,734		36.39			—		—		—		—		—

	New York											Washington, DC
							Annualized											Annualized
			Current Annualized				Rental Obligations							Current Annualized				Rental Obligations
	Rentable Square		Rental Obligations		Per		Under		Per			Rentable Square		Rental Obligations		Per		Under		Per
Year of Lease	Footage Subject to		Under		Square		Expiring Leases		Square			Footage Subject to		Under		Square		Expiring Leases		Square
Expiration	Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot			Expiring Leases		Expiring Leases		Foot		with future step-ups		Foot
2016		150,868	$	4,789,738	$	31.75	$	5,003,898	$	33.17	(4)		209,483	$	13,249,521	$	63.25	$	13,273,326	$	63.36	(4)(5)
2017		163,820		6,030,364		36.81		6,040,334		36.87			307,384		15,019,139		48.86		15,215,747		49.50	(5)
2018		217,514		7,353,256		33.81		7,511,363		34.53			341,967		18,115,431		52.97		18,778,145		54.91
2019		156,333		5,805,177		37.13		5,921,398		37.88			629,631		22,947,866		36.45		23,499,977		37.32
2020		307,568		10,499,290		34.14		11,101,834		36.10			897,024		35,321,374		39.38		37,129,898		41.39
2021		101,620		3,359,347		33.06		3,536,580		34.80			749,743		32,911,284		43.90		36,565,424		48.77
2022		62,319		2,043,535		32.79		2,230,649		35.79			657,715		28,166,985		42.83		32,657,900		49.65
2023		8,299		264,197		31.83		280,795		33.83			514,551		23,361,300		45.40		27,086,590		52.64
2024		384,402		13,365,238		34.77		14,145,949		36.80			461,166		20,453,242		44.35		23,615,782		51.21
2025		133,747		4,831,735		36.13		5,316,299		39.75			454,447		18,236,708		40.13		21,786,380		47.94
Thereafter		328,408		11,197,986		34.10		12,443,106		37.89			276,639		12,005,034		43.40		14,730,517		53.25

⁽¹⁾	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

⁽²⁾	Includes 100% of joint venture properties. Does not include residential units and hotel.

⁽³⁾	Does not include data for leases expiring in a particular year when leases for the same space have already been signed with replacement tenants with future commencement dates. In those cases, the data is included in the year in which the future lease expires.

⁽⁴⁾	Includes square feet expiring on the last day of the current quarter.

⁽⁵⁾	Includes 50,185 and 9,570 square feet of Sensitive Compartmented Information Facility (SCIF) space in 2016 and 2017, respectively. Excluding the SCIF space, the current and future expiring rental rates per square foot would be $42.09 and $42.24 and $46.58 and $47.20, respectively.

LOGO

SECOND QUARTER 2016

RESIDENTIAL and HOTEL PERFORMANCE


*Rental Rates and Occupancy*
	Second Quarter						Percent			YTD						Percent
	2016			2015			Change			2016			2015			Change
*The Avant at Reston Town Center (359 units)*
*Reston, VA*
Average Monthly Rental Rate (1)	$	2,367		$	2,263			4.6	%	$	2,347		$	2,254			4.1	%
Average Rental Rate Per Occupied Square Foot (1)	$	2.60		$	2.42			7.4	%	$	2.57		$	2.44			5.3	%
Average Physical Occupancy (1) (2)		94.0	%		93.9	%		0.1	%		93.4	%		87.1	%		7.2	%
Average Economic Occupancy (2)		93.9	%		92.1	%		2.0	%		93.3	%		84.5	%		10.4	%
*The Lofts at Atlantic Wharf (86 units)*
*Boston, MA*
Average Monthly Rental Rate (3)	$	4,150		$	4,013			3.4	%	$	4,153		$	4,013			3.5	%
Average Rental Rate Per Occupied Square Foot (3)	$	4.59		$	4.48			2.5	%	$	4.57		$	4.46			2.5	%
Average Physical Occupancy (2) (3)		95.4	%		96.9	%		(1.5	)%		96.1	%		97.5	%		(1.4	)%
Average Economic Occupancy (2)		96.4	%		96.9	%		(0.5	)%		97.6	%		97.9	%		(0.3	)%
*Boston Marriott Cambridge (433 rooms)*
*Cambridge, MA*
Average Occupancy		84.3	%		86.7	%		(2.8	)%		79.7	%		82.8	%		(3.7	)%
Average Daily Rate	$	299.42		$	298.70			0.2	%	$	263.61		$	263.05			0.2	%
Revenue per available room	$	252.34		$	259.10			(2.6	)%	$	210.21		$	217.71			(3.4	)%


*Net Operating Income (dollars in thousands)*
	Residential									Hotel
	Second Quarter						Percent			Second Quarter				Percent
	2016			2015			Change			2016		2015		Change
Rental Revenue	$	4,088	(4)	$	3,811	(4)		7.3	%	$	12,808	$	13,403		(4.4	)%
Operating expenses and real estate taxes		1,606			1,531			4.9	%		7,978		8,495		(6.1	)%

Net Operating Income	$	2,482	(4)	$	2,280	(4)		8.9	%	$	4,830	$	4,908		(1.6	)%

Rental Revenue	$	4,088		$	3,811					$	12,808	$	13,403
Less: Straight-line rent and fair value lease revenue		18			24			(25.0	)%		1		1		—

Subtotal		4,070			3,787			7.5	%		12,807		13,402		(4.4	)%
Less: Operating expenses and real estate taxes		1,606			1,531			4.9	%		7,978		8,495		(6.1	)%
Add: Straight-line ground rent expense		—			—			—			—		—		—

Net Operating Income—cash basis	$	2,464		$	2,256			9.2	%	$	4,829	$	4,907		(1.6	)%

(1)	Excludes 26,179 square feet of retail space which is 100% leased.

(2)	For disclosures related to the Company’s definition of Average Physical and Average Economic Occupancy, see page 47.

(3)	Excludes 9,617 square feet of retail space which is 100% leased.

(4)	Includes 35,796 square feet of retail space, which had revenue of approximately $483 and $464 for the three months ended June 30, 2016 and June 30, 2015, respectively.

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SECOND QUARTER 2016

SAME PROPERTY PERFORMANCE

Office and Hotel & Residential Properties


	Office (1)			Hotel & Residential (1)			Total
Number of Properties		148			3			151
Square feet		40,322,014			776,704			41,098,718
Percent of properties in-service		96.0	%		100.0	%		96.1	%
Occupancy @ 6/30/2015		92.0	%		N/A			92.0	%
Occupancy @ 6/30/2016		90.9	%		N/A			90.9	%
Percent change from 2nd quarter 2016 over 2nd quarter 2015 (2):
Combined Net Operating Income (3)								(0.8	)%
BXP’s Share of Combined Net Operating Income (3)								0.7	%
Combined Net Operating Income - cash basis (3)								3.3	%
BXP’s Share of Combined Net Operating Income (3) - cash basis								4.7	%

Same Property Lease Analysis - quarter ended June 30, 2016


	Total Office
Vacant space available @ 4/1/2016 (sf)		3,508,157
Property dispositions/ properties taken out of service (sf)		—
Square footage of leases expiring or terminated 4/1/2016-6/30/2016		1,484,034

Total space for lease (sf)		4,992,191

New tenants (sf)		591,291
Renewals (sf)		742,184

Total space leased (sf)		1,333,475

Space available @ 6/30/2016 (sf)		3,658,716

Net (increase)/decrease in available space (sf)		(150,559	)
Second generation leasing information: (4)
Leases commencing during the period (sf)		1,304,751
Weighted average lease term (months)		104
Weighted average free rent period (days)		88
Total transaction costs per square foot (5)	$	70.13
Increase (decrease) in gross rents (6)		18.27	%
Increase (decrease) in net rents (7)		28.11	%

(1)	Includes revenue and expenses from retail properties and tenants.

(2)	See page 41 for a quantitative reconciliation of Same Property Net Operating Income (NOI) by reportable segment.

(3)

For a quantitative reconciliation of Net income attributable to Boston Properties, Inc. common shareholders to Combined NOI, Combined NOI—cash basis, BXP’s Share of Combined NOI and BXP’s Share of Combined NOI—cash basis, see page 40. For disclosures relating to the Company’s use of Combined NOI and BXP’s Share of Combined NOI see pages 47-48.

(4)	Second generation leases are defined as leases for space that had previously been under lease by the Company. Of the 1,304,751 square feet of second generation leases that commenced in Q2 2016, leases for 1,163,010 square feet were signed in prior periods.

(5)	Total transaction costs include tenant improvements and leasing commissions and exclude free rent concessions.

(6)

Represents the increase/(decrease) in gross rent (base rent plus expense reimbursements) on the new vs. expired leases on the 1,081,775 square feet of second generation leases that had been occupied within the prior 12 months; excludes leases that management considers temporary because the tenant is not expected to occupy the space on a long-term basis (e.g., the tenant is occupying “swing space”).

(7)

Represents the increase/(decrease) in net rent (gross rent less operating expenses) on the new vs. expired leases on the 1,081,775 square feet of second generation leases that had been occupied within the prior 12 months; excludes leases that management considers temporary because the tenant is not expected to occupy the space on a long-term basis (e.g., the tenant is occupying “swing space”).

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SECOND QUARTER 2016

RECONCILIATION OF NET INCOME TO NET OPERATING INCOME (NOI)

(in thousands)


	For the three months ended
	June 30, 2016			June 30, 2015
Net income attributable to Boston Properties, Inc. common shareholders	$	96,597		$	79,460
Preferred dividends		2,589			2,618

Net income attributable to Boston Properties, Inc.		99,186			82,078
Net income attributable to noncontrolling interests:
Noncontrolling interest—common units of the Operating Partnership		11,357			9,394
Noncontrolling interest—redeemable preferred units of the Operating Partnership		—			3
Noncontrolling interest in property partnerships (1)		6,814			9,264

Net income		117,357			100,739
Add:
Interest expense		105,003			108,534
Depreciation and amortization		153,175			167,844
Transaction costs		913			208
General and administrative expense		25,418			22,284
Subtract:
Gains (losses) from investments in securities		(478	)		24
Interest and other income		(1,524	)		(1,293	)
Income from unconsolidated joint ventures		(2,234	)		(3,078	)
Development and management services income		(5,533	)		(4,862	)

Consolidated NOI		392,097			390,400
Add:
BXP’s share of NOI from unconsolidated joint ventures (2)		10,672			11,374

Combined NOI		402,769			401,774
Subtract:
Partners’ share of NOI from consolidated joint ventures (3)		(44,208	)		(55,975	)

BXP’s Share of Combined NOI		358,561			345,799
Subtract:
BXP’s share of Combined Termination income		(7,614	)		(5,419	)

BXP’s Share of Combined NOI (excluding termination income)	$	350,947		$	340,380

Combined NOI	$	402,769		$	401,774
Subtract:
NOI from non Same Properties (4)		(12,796	)		(9,408	)
Termination income		(7,658	)		(6,860	)

Combined Same Property NOI		382,315			385,506
Subtract:
Partners’ share of NOI from consolidated joint ventures (3)		(44,208	)		(55,975	)
Add:
Partners’ share of Termination Income from consolidated joint ventures (3)		44			1,441
Partners’ share of NOI from non Same Properties from consolidated joint ventures (4)(5)		—			4,969

BXP’s Share of Combined Same Property NOI	$	338,151		$	335,941

NOI—cash basis reconciliation
Combined Same Property NOI	$	382,315		$	385,506
Subtract:
Straight-line rent and fair value lease revenue		(8,310	)		(27,686	)
Add:
Straight-line ground rent expense (6)		935			1,106
Lease transaction costs that qualify as inducements in accordance with GAAP (7)		377			4,355

Combined Same Property NOI—cash basis		375,317			363,281
Subtract:
Partners’ share of NOI from Same Property—cash basis (3)(4)		(40,415	)		(43,474	)

BXP’s Share of Combined Same Property NOI—cash basis	$	334,902		$	319,807

(1)

These partnerships include 505 9th Street, N.W. in Washington, DC, which was sold on September 18, 2015, Fountain Square in Reston, VA, of which the Company acquired the remaining 50% interest on September 15, 2015, 767 Fifth Avenue (The GM Building), 601 Lexington Avenue and Times Square Tower in New York City, Salesforce Tower in San Francisco, CA and 100 Federal Street and Atlantic Wharf Office Building in Boston, MA. For additional information, refer to page 9.

(2)	For disclosures related to the calculation of BXP’s Share of NOI from unconsolidated joint ventures, see page 18.

(3)	For disclosures related to the calculation of Partners’ share of NOI and NOI - cash basis from consolidated joint ventures, see page 20.

(4)	Pages 22-24 indicate by footnote the properties which are not included as part of Same Property NOI. Non Same Properties include dispositions that occurred prior to June 30, 2016 and therefore are no longer a part of the Company’s property portfolio.

(5)

On September 15, 2015, the Company acquired its partner’s 50% interest in the entity that owns Fountain Square. As a result, the Partners’ share of NOI from non Same Properties from consolidated joint ventures for the three months ended June 30, 2015 is included in Partners’ share of NOI from non Same Properties from consolidated joint ventures.

(6)	For additional information, refer to page 12.

(7)	For additional information, refer to page 42.

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SECOND QUARTER 2016

SAME PROPERTY NET OPERATING INCOME BY REPORTABLE SEGMENT

(dollars in thousands)


	Office (1)										Hotel & Residential
	For the three months ended										For the three months ended
	30-Jun-16		30-Jun-15		$ Change			% Change			30-Jun-16		30-Jun-15		$ Change			% Change
Rental Revenue	$	583,888	$	581,168							$	16,896	$	17,214
Less: Termination Income		7,654		6,680								—		—

Rental revenue (excluding termination income)		576,234		574,488	$	1,746			0.3	%		16,896		17,214	$	(318	)		(1.8	)%
Operating expenses and real estate taxes		211,555		207,364		4,191			2.0	%		9,584		10,026		(442	)		(4.4	)%

Net Operating Income (2)	$	364,679	$	367,124	$	(2,445	)		(0.7	)%	$	7,312	$	7,188	$	124			1.7	%

Rental revenue (excluding termination income)	$	576,234	$	574,488							$	16,896	$	17,214
Less:
Straight-line rent and fair value lease revenue		6,526		27,606		(21,080	)		(76.4	)%		19		24		(5	)		(20.8	)%
Add:
Lease transaction costs that qualify as inducements in accordance with GAAP (3)		377		4,285		(3,908	)		(91.2	)%		—		—		—			—

Subtotal		570,085		551,167		18,918			3.4	%		16,877		17,190		(313	)		(1.8	)%
Less:
Operating expenses and real estate taxes		211,555		207,364		4,191			2.0	%		9,584		10,026		(442	)		(4.4	)%
Add:
Straight-line ground rent expense (4)		935		1,106		(171	)		(15.5	)%		—		—		—			—

Net Operating Income (5) - cash basis	$	359,465	$	344,909	$	14,556			4.2	%	$	7,293	$	7,164	$	129			1.8	%


	Consolidated Total (1)										Unconsolidated Joint Ventures (BXP’s Share)
	For the three months ended										For the three months ended
	30-Jun-16		30-Jun-15		$ Change			% Change			30-Jun-16		30-Jun-15		$ Change			% Change
Rental Revenue	$	600,784	$	598,382							$	18,255	$	19,264
Less: Termination Income		7,654		6,680								4		180

Rental revenue (excluding termination income)		593,130		591,702	$	1,428			0.2	%		18,251		19,084	$	(833	)		(4.4	)%
Operating expenses and real estate taxes		221,139		217,390		3,749			1.7	%		7,927		7,890		37			0.5	%

Net Operating Income (2)	$	371,991	$	374,312	$	(2,321	)		(0.6	)%	$	10,324	$	11,194	$	(870	)		(7.8	)%

Rental revenue (excluding termination income)	$	593,130	$	591,702							$	18,251	$	19,084
Less:
Straight-line rent and fair value lease revenue		6,545		27,630		(21,085	)		(76.3	)%		1,765		56		1,709			3051.8	%
Add:
Lease transaction costs that qualify as inducements in accordance with GAAP (3)		377		4,285		(3,908	)		(91.2	)%		—		70		(70	)		(100.0	)%

Subtotal		586,962		568,357		18,605			3.3	%		16,486		19,098		(2,612	)		(13.7	)%
Less:
Operating expenses and real estate taxes		221,139		217,390		3,749			1.7	%		7,927		7,890		37			0.5	%
Add:
Straight-line ground rent expense (4)		935		1,106		(171	)		(15.5	)%		—		—		—			—

Net Operating Income (5) - cash basis	$	366,758	$	352,073	$	14,685			4.2	%	$	8,559	$	11,208	$	(2,649	)		(23.6	)%


	Combined										BXP’s Share of Combined (6)
	For the three months ended										For the three months ended
	30-Jun-16		30-Jun-15		$ Change			% Change			30-Jun-16		30-Jun-15		$ Change			% Change
Rental Revenue	$	619,039	$	617,646							$	549,430	$	542,143
Less: Termination Income		7,658		6,860								7,614		5,463

Rental revenue (excluding termination income)		611,381		610,786	$	595			0.1	%		541,816		536,680	$	5,136			1.0	%
Operating expenses and real estate taxes		229,066		225,280		3,786			1.7	%		203,665		200,739		2,926			1.5	%

Net Operating Income (2)	$	382,315	$	385,506	$	(3,191	)		(0.8	)%	$	338,151	$	335,941	$	2,210			0.7	%

Rental revenue (excluding termination income)	$	611,381	$	610,786							$	541,816	$	536,680
Less:
Straight-line rent and fair value lease revenue		8,310	$	27,686		(19,376	)		(70.0	)%		4,561		20,381		(15,820	)		(77.6	)%
Add:
Lease transaction costs that qualify as inducements in accordance with GAAP (3)		377	$	4,355		(3,978	)		(91.3	)%		377		3,141		(2,764	)		(88.0	)%

Subtotal		603,448	$	587,455		15,993			2.7	%		537,632		519,440		18,192			3.5	%
Less:
Operating expenses and real estate taxes		229,066	$	225,280		3,786			1.7	%		203,665		200,739		2,926			1.5	%
Add:
Straight-line ground rent expense (4)		935	$	1,106		(171	)		(15.5	)%		935		1,106		(171	)		(15.5	)%

Net Operating Income (5) - cash basis	$	375,317	$	363,281	$	12,036			3.3	%	$	334,902	$	319,807	$	15,095			4.7	%

(1)

Includes 100% share of consolidated joint ventures. Same Property consolidated joint venture properties includes Fountain Square in Reston, VA, of which the Company acquired the remaining 50% interest on September 15, 2015, 767 Fifth Avenue (The GM Building), 601 Lexington Avenue and Times Square Tower in New York City and 100 Federal Street and Atlantic Wharf Office Building in Boston, MA.

(2)	For a quantitative reconciliation of net operating income (NOI) to net income attributable to Boston Properties, Inc. common shareholders, see page 40. For disclosures relating to the Company’s use of NOI, see pages 47-48.

(3)	Leasing transaction costs are generally included in 2nd generation tenant improvements and leasing commissions in the Company’s FAD calculation on page 12. For additional information related to second generation transaction costs, see page 42.

(4)	For additional information, see page 12.

(5)	For a quantitative reconciliation of NOI to NOI on a cash basis see page 40. For disclosures relating to the Company’s use of NOI, see pages 47-48.

(6)

See page 20 for the partners’ share of each line item. On September 15, 2015, the Company acquired its partner’s 50% interest in the entity that owns Fountain Square. As a result, the partner’s share of NOI for the three months ended June 30, 2015 is included in Partners’ share of consolidated joint ventures NOI from non Same Properties.

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SECOND QUARTER 2016

LEASING ACTIVITY

for the three months ended June 30, 2016

All In-Service Properties


	Total
Vacant space available @ 4/1/2016 (sf)		3,688,984
Property dispositions/ properties taken out of service (sf)		—
Properties acquired vacant space (sf)		—
Properties placed in-service (sf)(1)		447,957
Leases expiring or terminated 4/1/2016-6/30/2016 (sf)		1,484,034

Total space available for lease (sf)		5,620,975

1st generation leases (sf)		446,934
2nd generation leases with new tenants (sf)		562,567
2nd generation lease renewals (sf)		742,184

Total space leased (sf)		1,751,685

Vacant space available for lease @ 6/30/2016 (sf)		3,869,290

Net (increase)/decrease in available space (sf)		(180,306	)
Second generation leasing information: (2)
Leases commencing during the period (sf)		1,304,751
Weighted average lease term (months)		104
Weighted average free rent period (days)		88
Total transaction costs per square foot (3)	$	70.13
Increase (decrease) in gross rents (4)		18.27	%
Increase (decrease) in net rents (5)		28.11	%


					Incr (decr)			Incr (decr)
	All leases		All leases		in 2nd gen.			in 2nd gen.			Total		Total square feet of leases
	1st Generation (sf)		2nd Generation (sf)		gross cash rents (4)			net cash rents (5)			Leased (sf) (6)		executed in the quarter (7)
Boston		224,193		185,134		40.30	%		75.88	%		409,327		98,742
New York		158,265		479,600		14.33	%		22.69	%		637,865		436,825
San Francisco		52,642		323,003		41.19	%		68.62	%		375,645		236,595
Washington, DC		11,834		317,014		7.15	%		6.73	%		328,848		153,439

Total / Weighted Average		446,934		1,304,751		18.27	%		28.11	%		1,751,685		925,601

(1)	Total vacant square feet of properties placed in service in Q2 2016 consist of 76,497 square feet at 601 Massachusetts Avenue, 130,000 square feet at 804 Carnegie Center and 241,460 square feet at 10 Citypoint.

(2)	Second generation leases are defined as leases for space that had previously been leased by the Company. Of the 1,304,751 square feet of second generation leases that commenced in Q2 2016, leases for 1,163,010 square feet were signed in prior periods.

(3)	Total transaction costs include tenant improvements and leasing commissions and exclude free rent concessions.

(4)

(5)

(6)	Represents leases for which rental revenue recognition has commenced in accordance with GAAP during the quarter.

(7)

Represents leases executed in the quarter for which the Company either (1) commenced rental revenue recognition in such quarter or (2) will commence rental revenue recognition in subsequent quarters, in accordance with GAAP, and includes leases at properties currently under development. The total square feet of leases executed in the current quarter and recognized in the current quarter is 145,869.

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SECOND QUARTER 2016

HISTORICALLY GENERATED CAPITAL EXPENDITURES,

TENANT IMPROVEMENT COSTS and LEASING COMMISSIONS

(dollars in thousands, except PSF amounts)

Historical Capital Expenditures (1)


	Q2 2016			Q1 2016			2015		2014		2013
Recurring capital expenditures	$	9,344		$	21,585		$	52,471	$	42,610	$	51,026
Hotel improvements, equipment upgrades and replacements		434			360			2,430		2,894		2,070
Planned capital expenditures associated with acquisition properties		—			87			6,069		13,087		20,506
Repositioning capital expenditures		12,475	(2)		13,015	(2)		9,820		—		—

	$	22,253		$	35,047		$	70,790	$	58,591	$	73,602

2nd Generation Tenant Improvements and Leasing Commissions


	Q2 2016		Q1 2016		2015		2014		2013
Square feet		1,304,751		1,376,563		5,204,123		3,936,046		3,610,088

Tenant improvements and lease commissions PSF	$	70.13	$	48.87	$	45.40	$	29.60	$	36.99

(1)	Includes the Company’s share of consolidated and unconsolidated joint ventures amounts.

(2)	Includes capital expenditures related to the repositioning activities designed to enhance revenue potential at 1330 Connecticut Avenue and Metropolitan Square in Washington, DC, Prudential Center Retail Improvements in Boston, MA, and 399 Park Avenue in New York City.

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SECOND QUARTER 2016

ACQUISITIONS/DISPOSITIONS

as of June 30, 2016

ACQUISITIONS

For the period from January 1, 2016 through June 30, 2016


						Anticipated
				Initial		Future		Total		Percentage
Property	Date Acquired	Square Feet		Investment		Investment		Investment		Leased
3625-3635 Peterson Way	April 22, 2016		218,366	$	78,000,000	$	—	$	78,000,000		100	%

Total Acquisitions			218,366	$	78,000,000	$	—	$	78,000,000		100	%

DISPOSITIONS

For the period from January 1, 2016 through June 30, 2016


				Gross		Net Cash
Property	Date Disposed	Square Feet		Sales Price		Proceeds		Book Gain
415 Main Street	February 1, 2016		231,028	$	105,360,000	$	104,868,000	$	60,803,000

Total Dispositions			231,028	$	105,360,000	$	104,868,000	$	60,803,000	(1)

(1)	Excludes approximately $6,820,000 of gain on sale of real estate recognized during the three months ended March 31, 2016 related to a previously deferred gain amount from a 2014 sale of real estate.

LOGO

SECOND QUARTER 2016

VALUE CREATION PIPELINE - CONSTRUCTION IN PROGRESS (1)

as of June 30, 2016


Construction Properties	Actual / Estimated Initial Occupancy	Actual / Estimated Stabilization Date	Location	# of Buildings		Square feet		Investment to Date (2)			Estimated Total Investment (2)			Total Financing(2)			Amount Drawn at 6/30/2016 (2)		Estimated Future Equity Requirement (2)		Percentage Leased (3)			Percentage Placed in service (4)
Office and Retail
1265 Main Street (50% Ownership)	Q4 2016	Q4 2016	Waltham, MA		1		115,000	$	19,395,177		$	26,090,000		$	—		$	—	$	6,694,823		100	%		—
Prudential Center Retail Expansion	Q1 2016	Q1 2017	Boston, MA		—		15,000		9,211,073			10,760,000			—			—		1,548,927		100	%		12	%
888 Boylston Street	Q3 2016	Q4 2017	Boston, MA		1		425,000		212,810,471			271,500,000			—			—		58,689,529		69	%		—
Salesforce Tower (95% ownership)	Q3 2017	Q1 2019	San Francisco, CA		1		1,400,000		559,744,670			1,073,500,000			(25,389,074	)(5)		—		539,144,404		59	%		—
The Hub on Causeway (50% ownership)	Q4 2018	Q4 2019	Boston, MA		1		385,000		19,339,785			141,870,000			—			—		122,530,215		33	%		—
Dock72 (50% ownership)	Q2 2018	Q1 2020	Brooklyn, NY		1		670,000		22,461,937			204,900,000			—			—		182,438,063		33	%		—

Total Office Properties under Construction					5		3,010,000	$	842,963,113		$	1,728,620,000		$	(25,389,074	)	$	—	$	911,045,961		53	%		0	%

Residential
Cambridge Residential / 88 Ames (274 units)	Q1 2018	Q1 2019	Cambridge, MA		1		164,000	$	15,581,155		$	140,170,000		$	—		$	—	$	124,588,845		N/A			—
Reston Signature Site (508 units)	Q4 2017	Q2 2020	Reston, VA		1		490,000		47,752,254	(6)		217,232,000	(6)		—			—		169,479,746		N/A			—
Reston Signature Site - Retail					—		24,600		—			—			—			—		—		81	%		—

Total Residential Properties under Construction					2		678,600	$	63,333,409		$	357,402,000		$	—		$	—	$	294,068,591		59	%(7)		—

Redevelopment Properties
Reservoir Place North	Q1 2017	Q3 2017	Waltham, MA		1		73,000	$	14,906,086		$	24,510,000		$	—		$	—	$	9,603,914		—			4	%

Total Redevelopment Properties under Construction					1		73,000	$	14,906,086		$	24,510,000		$	—		$	—	$	9,603,914		—			4	%

Total Properties Under Construction and Redevelopment					8		3,761,600	$	921,202,608		$	2,110,532,000		$	(25,389,074	)	$	—	$	1,214,718,466		52	%(7)		0	%

PROJECTS FULLY PLACED IN-SERVICE DURING 2016


	Actual / Estimated	Actual / Estimated		# of				Investment		Estimated Total		Total Financing		Amount Drawn at		Estimated Future Equity		Percentage
	Initial Occupancy	Stabilization Date	Location	Buildings		Square feet		to Date (2)		Investment (2)		(2)		6/30/2016 (2)		Requirement (2)		Leased (3)
804 Carnegie Center	Q2 2016	Q2 2016	Princeton, NJ		1		130,000	$	45,993,815	$	47,000,000	$	—	$	—	$	1,006,185		100	%
601 Massachusetts Avenue	Q3 2015	Q1 2017	Washington, DC		1		478,883		302,605,705		339,760,000		—		—		37,154,295		90	%
10 CityPoint	Q2 2016	Q2 2016	Waltham, MA		1		241,460		84,715,237		100,400,000		—		—		15,684,763		97	%

Total Projects placed In-Service					3		850,343	$	433,314,757	$	487,160,000	$	—	$	—	$	53,845,243		94	%

IN-SERVICE PROPERTIES HELD FOR REDEVELOPMENT


		# of		Existing					Annualized Rental Obligations		Encumbered with secured	Central Business District (CBD) or	Incremental Estimated
	Sub Market	Buildings		Square Feet		Leased %			Per Leased SF (8)		debt (Y/N)	Suburban (S)	Future SF (9)
North First Business Park	San Jose, CA		5		190,636		100.0	%	$	18.77	N	S		1,359,364
3625-3635 Peterson Way	Santa Clara, CA		1		218,366		100.0	%		21.84	N	S		413,690

Total Properties held for Redevelopment			6		409,002		100.0	%	$	20.41				1,773,054

(1)	A project is classified as Construction in Progress when construction or supply contracts have been signed, physical improvements have commenced or a lease has been signed.

(2)	Represents the Company’s share. Includes income (loss) and interest carry.

(3)	Represents percentage leased as of July 22, 2016, including leases with future commencement dates and excluding residential units.

(4)	Represents the portion of the project that no longer qualifies for capitalization of interest in accordance with GAAP.

(5)

Under the joint venture agreement, if the project is funded with 100% equity, the Company has agreed to fund 50% of our partner’s equity requirement as a notional construction loan. We will fund approximately $25 million at a rate of LIBOR plus 3.0% and receive priority distributions from all distributions to our partner until the principal and interest are repaid.

(6)	Excludes $10 million of the purchase price for the site that is allocated to rights for future development in Reston Town Center.

(7)	Includes approximately 9,000 square feet of retail space from Cambridge Residential / 88 Ames residential development which is 0% leased.

(8)	For disclosures relating to the Company’s definition of Annualized Rental Obligations, see page 47.

(9)	Incremental Future Square Footage is included in Approximate Developable Square Feet of Value Creation Pipeline—Owned Land Parcels on page 46.

LOGO

SECOND QUARTER 2016

VALUE CREATION PIPELINE

as of June 30, 2016

Owned Land Parcels


			Approximate
			Developable
Location	Acreage		Square Feet
San Jose, CA (1)		28.0		2,199,000
Reston, VA		33.8		1,160,000
Waltham, MA		11.3		805,000
Springfield, VA		17.8		800,000
Dulles, VA		76.6		760,000
Rockville, MD		58.1		759,000
Santa Clara, CA (1)(2)		14.5		414,000
Gaithersburg, MD		12.5		240,000
Washington, DC (50% ownership)		1.3		520,000
Marlborough, MA		50.0		400,000
Annapolis, MD (50% ownership)		20.0		300,000
Andover, MA		10.0		110,000

		333.9		8,467,000

Land Purchase Options


			Approximate
			Developable
Location	Acreage		Square Feet
Princeton, NJ		134.1		1,650,000
Boston, MA (50% ownership)		—		1,415,000
Boston, MA (3)				1,300,000
Cambridge, MA		—		940,000
Brooklyn, NY (50% ownership)		1.3		600,000
San Francisco, CA		2.3		TBD

		137.7		5,905,000

(1)	Excludes the existing square footage related to in-service properties being held for future re-development included on page 45.

(2)

On April 22, 2016, the Company acquired 3625-3635 Peterson Way located in Santa Clara, California for a purchase price of approximately $78.0 million in cash. 3625-3635 Peterson Way is an approximately 218,000 net rentable square foot office property. The property is 100% leased to a single tenant through March 2021. Following the lease expiration, the Company intends to develop the site into a Class A office campus containing an aggregate of approximately 632,000 net rentable square feet.

(3)

The Company has begun the City and State permitting processes for approximately 1.3 million square feet of office, retail and residential development. Zoning was enacted in Q1 2016, that supports the filings. The Company assumed the option to acquire these air rights in Q3 2015, as part of the Amendment to the Ground and Air Rights lease assumed in 2010 at the time it acquired its interests in both 100 and 200 Clarendon Street.

LOGO

SECOND QUARTER 2016

DEFINITIONS

This section contains definitions of certain non-GAAP financial measures and other terms the Company provides in other sections of this document, as well as the reasons why management believes the non-GAAP financial measures provide useful information to investors about the Company’s financial condition and results of operations. Additional detail can be found in the Company’s most recent annual report on Form 10-K and quarterly report on Form 10-Q, as well as other documents filed with or furnished to the SEC from time to time.

Annualized Rental Obligations

Annualized Rental Obligations is defined as rental obligations at the end of the reporting period, including contractual base rents (but excluding percentage rent) and budgeted reimbursements from tenants under existing leases, multiplied by twelve. These annualized amounts exclude rent abatements.

Average Economic Occupancy

Average Economic Occupancy is defined as total possible revenue less vacancy loss as a percentage of total possible revenue. Total possible revenue is determined by valuing average occupied units at contract rates and average vacant units at Market Rents. Vacancy loss is determined by valuing vacant units at current Market Rents. By measuring vacant units at their Market Rents, Average Economic Occupancy takes into account the fact that units of different sizes and locations within a residential property have different economic impacts on a residential property’s total possible gross revenue.

Average Monthly Rental Rates

Average Rental Rates are calculated by the Company as rental revenue in accordance with GAAP, divided by the weighted monthly average number of occupied units.

Average Physical Occupancy

Average Physical Occupancy is defined as the average number of occupied units divided by the total number of units, expressed as a percentage.

BXP’s Share of Combined Debt to BXP’s Share of Combined Market Capitalization Ratio

BXP’s Share of Combined Debt to BXP’s Share of Combined Market Capitalization Ratio, defined as BXP’s Share of Combined Debt (which equals the Company’s consolidated debt, plus the Company’s share of unconsolidated joint venture debt, minus the Company’s joint venture partners’ share of consolidated debt) as a percentage of the market value of the Company’s outstanding equity securities plus BXP’s Share of Combined Debt, is an alternative measure of leverage used by some analysts in the REIT sector. BXP’s Share of Combined Market Capitalization is the sum of (A) BXP’s Share of Combined Debt plus (B) the market value of the Company’s outstanding equity securities calculated using the closing price per share of common stock of the Company multiplied by the sum of (1) outstanding shares of common stock of the Company, (2) outstanding common units of limited partnership interest in Boston Properties Limited Partnership (excluding common units held by the Company), (3) common units issuable upon conversion of all outstanding LTIP Units, assuming all conditions have been met for the conversion of the LTIP Units, (4) as of February 6, 2015, which was the date earned, 2012 OPP Units that were issued in the form of LTIP Units and (5) as of February 4, 2016, which was the date earned, 2013 MYLTIP Units that were issued in the form of LTIP Units plus (C) outstanding shares of 5.25% Series B Cumulative Redeemable Preferred Stock multiplied by the fixed liquidation preference of $2,500 per share. The calculation of BXP’s Share of Combined Market Capitalization does not include LTIP Units issued in the form of 2014, 2015 and 2016 MYLTIP Awards unless and until certain performance thresholds are achieved and they are earned.

The Company presents this ratio because, following the consolidation of 767 Venture, LLC (the entity that owns 767 Fifth Avenue (The GM Building)) effective June 1, 2013, the Company’s consolidated debt increased significantly compared to prior periods even though the Company’s economic interest in 767 Venture, LLC remained substantially unchanged at 60%. Similarly, after selling an interest in 601 Lexington Avenue, the Company’s economic interest in the property decreased to 55% even though it continues to consolidate the related mortgage indebtedness. Accordingly, the Company believes the presentation of BXP’s Share of Combined Debt may provide investors with a more complete picture of the Company’s share of consolidated and unconsolidated debt. In addition, in light of the difference between its consolidated debt and BXP’s Share of Combined Debt, the Company believes that also presenting BXP’s Share of Combined Debt to BXP’s Share of Combined Market Capitalization may provide investors with a more complete picture of its leverage in relation to the overall size of the Company. Investors should understand that BXP’s Share of Combined Debt to BXP’s Share of Combined Market Capitalization Ratio is in part a function of the market price of the common stock of the Company, and as such will fluctuate with changes in such price and does not necessarily reflect the Company’s capacity to incur additional debt to finance its activities or its ability to manage its existing debt obligations. BXP’s Share of Combined Debt to BXP’s Share of Combined Market Capitalization ratio should be evaluated along with the ratio of indebtedness to other measures of asset value used by financial analysts and other financial ratios, as well as the various components of the Company’s outstanding indebtedness.

BXP’s Share of Combined Net Operating Income (NOI)

BXP’s Share of Combined NOI is a non-GAAP financial measure equal to Combined NOI less the Company’s partners’ share of NOI from consolidated joint ventures. In some cases the Company also presents BXP’s Share of Combined NOI on a cash basis, which is BXP’s Share of Combined NOI after eliminating the effects of straight-lining of rent and fair value lease revenue and lease transaction costs that qualify as inducements in accordance with GAAP. In addition to Consolidated NOI and Combined NOI, the Company uses BXP’s Share of Combined NOI internally as a performance measure and believe BXP’s Share of Combined NOI provides useful information to investors regarding its financial condition and results of operations because it does not include the Company’s partners’ share of consolidated joint ventures, which have become significant. Therefore, the Company believes BXP’s Share of Combined NOI is a useful measure for evaluating the operating performance of its share of all of its real estate assets, including those held by its consolidated and unconsolidated joint ventures. The Company’s management also uses BXP’s Share of Combined NOI to evaluate regional property level performance and to make decisions about resource allocations. Further, like Consolidated NOI and Combined NOI, the Company believes BXP’s Share of Combined NOI is useful to investors as a performance measure because, when compared across periods, BXP’s Share of Combined NOI reflects the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and development activity on an unleveraged basis, providing perspective not immediately apparent from net income attributable to Boston Properties, Inc. common shareholders. BXP’s Share of Combined NOI presented by the Company may not be comparable to the share of combined NOI reported by other REITs that define it differently. The Company believes that in order to facilitate a clear understanding of its operating results, BXP’s Share of Combined NOI should be examined in conjunction with net income attributable to Boston Properties, Inc. common shareholders as presented in its consolidated financial statements. BXP’s Share of Combined NOI should not be considered as an alternative to net income attributable to Boston Properties, Inc. common shareholders as an indication of its performance or to cash flows as a measure of its liquidity or ability to make distributions.

BXP’s Share of Combined NOI (excluding termination income) by location and building type (in thousands):


	Boston		New York		San Francisco		Washington, DC		Total
Office	$	101,892	$	114,086	$	53,054	$	74,603	$	343,635
Residential		667		—		—		1,815		2,482
Hotel		4,830		—		—		—		4,830

Total	$	107,389	$	114,086	$	53,054	$	76,418	$	350,947	(1)

(1)	See page 40 for a reconciliation of Net income attributable to Boston Properties, Inc. common shareholders to BXP’s Share of Combined NOI (excluding termination income).

LOGO

SECOND QUARTER 2016

DEFINITIONS

BXP’s Share of Combined Rental Obligations

BXP’s Share of Combined Rental Obligations is defined as the Company’s share of rental obligations, which is contractual base rents (but excluding percentage rent) and budgeted reimbursements from tenants under existing leases, from the consolidated portfolio plus the Company’s share of rental obligations from its unconsolidated joint venture portfolio less the Company’s partners’ share of rental obligations from its consolidated joint ventures. These amounts exclude rent abatements.

Combined Debt

Combined Debt equals the Company’s consolidated debt, plus the Company’s share of unconsolidated joint venture debt.

Combined Net Operating Income (NOI)

Combined NOI is a non-GAAP financial measure equal to Consolidated NOI plus the Company’s share of NOI from unconsolidated joint ventures. In addition to Consolidated NOI, the Company uses Combined NOI internally as a performance measures and believe Combined NOI provides useful information to investors regarding its financial condition and results of operations because it includes the impact of the Company’s share of NOI from unconsolidated joint ventures. Therefore, the Company believes Combined NOI is a useful measure for evaluating the operating performance of all of its real estate assets, including those held by its unconsolidated joint ventures. The Company’s management also uses Combined NOI to evaluate regional property level performance and to make decisions about resource allocations. Further, like Consolidated NOI, the Company believes Combined NOI is useful to investors as a performance measure because, when compared across periods, Combined NOI reflects the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and development activity on an unleveraged basis, providing perspective not immediately apparent from net income attributable to Boston Properties, Inc. common shareholders. In some cases the Company also presents Combined NOI on a cash basis, which is Combined NOI after eliminating the effects of straight-lining of rent and fair value lease revenue and lease transaction costs that qualify as inducements in accordance with GAAP because some investors prefer evaluating the Company’s operating performance and that of its peers in both manners. Combined NOI presented by the Company may not be comparable to Combined NOI reported by other REITs that define Combined NOI differently. The Company believes that in order to facilitate a clear understanding of its operating results, Combined NOI should be examined in conjunction with net income attributable to Boston Properties, Inc. common shareholders as presented in its consolidated financial statements. Combined NOI should not be considered as an alternative to net income attributable to Boston Properties, Inc. common shareholders as an indication of its performance or to cash flows as a measure of its liquidity or ability to make distributions.

Consolidated Debt to Consolidated Market Capitalization Ratio

Consolidated Debt to Consolidated Market Capitalization Ratio, defined as consolidated debt as a percentage of the market value of the Company’s outstanding equity securities plus the Company’s consolidated debt, is a measure of leverage commonly used by analysts in the REIT sector. Consolidated Market Capitalization is the sum of (A) the Company’s consolidated indebtedness outstanding plus (B) the market value of the Company’s outstanding equity securities calculated using the closing price per share of common stock of the Company multiplied by the sum of (1) outstanding shares of common stock of the Company, (2) outstanding common units of limited partnership interest in Boston Properties Limited Partnership (excluding common units held by the Company), (3) common units issuable upon conversion of all outstanding LTIP Units, assuming all conditions have been met for the conversion of the LTIP Units, (4) as of February 6, 2015, which was the date earned, 2012 OPP Units that were issued in the form of LTIP Units and (5) as of February 4, 2016, which was the date earned, 2013 MYLTIP Units that were issued in the form of LTIP Units plus (C) outstanding shares of 5.25% Series B Cumulative Redeemable Preferred Stock multiplied by the fixed liquidation preference of $2,500 per share. The calculation of consolidated market capitalization does not include LTIP Units issued in the form of MYLTIP Awards unless and until certain performance thresholds are achieved and they are earned, and therefore 2014, 2015 and 2016 MYLTIP Units are not included. The Company is presenting this ratio because its degree of leverage could affect its ability to obtain additional financing for working capital, capital expenditures, acquisitions, development or other general corporate purposes. Investors should understand that the Company’s Consolidated Debt to Consolidated Market Capitalization Ratio is in part a function of the market price of the common stock of the Company, and as such will fluctuate with changes in such price and does not necessarily reflect its capacity to incur additional debt to finance its activities or its ability to manage its existing debt obligations. However, for a company like BXP, whose assets are primarily income-producing real estate, the Consolidated Debt to Consolidated Market Capitalization Ratio may provide investors with an alternate indication of leverage, so long as it is evaluated along with the ratio of indebtedness to other measures of asset value used by financial analysts and other financial ratios, as well as the various components of the Company’s outstanding indebtedness.

Consolidated Net Operating Income (NOI)

Consolidated NOI is a non-GAAP financial measure equal to net income attributable to Boston Properties, Inc. common shareholders, the most directly comparable GAAP financial measure, plus preferred dividends, net income attributable to noncontrolling interests, plus corporate general and administrative expense, transaction costs, depreciation and amortization and interest expense, less development and management services income, income from unconsolidated joint ventures, interest and other income and gains (losses) from investments in securities. In some cases the Company also presents Consolidated NOI on a cash basis, which is Consolidated NOI after eliminating the effects of straight-lining of rent and fair value lease revenue and lease transaction costs that qualify as inducements in accordance with GAAP. The Company uses Consolidated NOI internally as a performance measure and believes Consolidated NOI provides useful information to investors regarding its financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level. Therefore, the Company believes Consolidated NOI is a useful measure for evaluating the operating performance of its real estate assets. The Company’s management also uses Consolidated NOI to evaluate regional property level performance and to make decisions about resource allocations. Further, the Company believes Consolidated NOI is useful to investors as a performance measure because, when compared across periods, Consolidated NOI reflects the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and development activity on an unleveraged basis, providing perspective not immediately apparent from net income. Consolidated NOI excludes certain components from net income in order to provide results that are more closely related to a property’s results of operations. For example, interest expense is not necessarily linked to the operating performance of a real estate asset and is often incurred at the corporate level as opposed to the property level. In addition, depreciation and amortization, because of historical cost accounting and useful life estimates, may distort operating performance at the property level. Consolidated NOI presented by the Company may not be comparable to Consolidated NOI reported by other REITs that define Consolidated NOI differently. The Company believes that in order to facilitate a clear understanding of its operating results, Consolidated NOI should be examined in conjunction with net income attributable to Boston Properties, Inc. common shareholders as presented in the Company’s consolidated financial statements. Consolidated NOI should not be considered as an alternative to net income attributable to Boston Properties, Inc. common shareholders as an indication of its performance or to cash flows as a measure of its liquidity or ability to make distributions.

LOGO

SECOND QUARTER 2016

DEFINITIONS

Funds Available for Distribution (FAD)

In addition to FFO, the Company presents Funds Available for Distribution (FAD), which is a non-GAAP financial measure that is calculated by (1) adding to FFO lease transaction costs that qualify as rent inducements, non-real estate depreciation, non-cash losses from early extinguishments of debt, stock-based compensation, partners’ share of consolidated and unconsolidated joint venture 2nd generation tenant improvement and leasing commissions (included in the period in which the lease commences) and unearned portion of capitalized fees, (2) eliminating the effects of straight-line rent, straight-line ground rent expense adjustment, fair value interest adjustment and fair value lease revenue, and (3) subtracting recurring capital expenditures, hotel improvements, equipment upgrades and replacements, 2nd generation tenant improvement and leasing commissions (included in the period in which the lease commences), non-cash termination income adjustment (fair value lease amounts) and impairment of non-depreciable real estate. The Company believes that the presentation of FAD provides useful information to investors regarding the Company’s results of operations because FAD, by presenting net income attributable to the Company’s common shareholders after making the adjustments described above, provides supplemental information regarding the Company’s operating performance that would not otherwise be available and may be useful to an investor in assessing the Company’s operating performance. Additionally, although FAD is not intended to be a liquidity measure, as it does not make adjustments to reflect changes in working capital or the actual timing of the payment of income or expense items that are accrued in the period, the Company believes that FAD may provide investors with useful supplemental information regarding the Company’s ability to generate cash from its operating performance and the impact of the Company’s operating performance on its ability to make distributions to its stockholders. Furthermore, the Company believes that FAD is frequently used by analysts, investors and other interested parties in the evaluation of its performance as a REIT and, as a result, by presenting FAD the Company is assisting these parties in their evaluation. FAD should not be considered as a substitute for net income (loss) attributable to the Company’s common shareholders determined in accordance with GAAP or any other GAAP financial measures and should only be considered together with and as a supplement to the Company’s financial information prepared in accordance with GAAP.

Funds from Operations (FFO)

Pursuant to the revised definition of Funds from Operations adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”), the Company calculates Funds from Operations, or “FFO,” by adjusting net income (loss) attributable to Boston Properties, Inc. common shareholders (computed in accordance with GAAP, including non-recurring items) for gains (or losses) from sales of properties, impairment losses on depreciable real estate consolidated on the Company’s balance sheet, impairment losses on its investments in unconsolidated joint ventures driven by a measurable decrease in the fair value of depreciable real estate held by the unconsolidated joint ventures, real estate-related depreciation and amortization, and the Company’s share of income (loss) from unconsolidated partnerships and joint ventures. FFO is a non-GAAP financial measure, but the Company believes the presentation of FFO, combined with the presentation of required GAAP financial measures, has improved the understanding of operating results of REITs among the investing public and has helped make comparisons of REIT operating results more meaningful. Management generally considers FFO and FFO per share to be useful measures for understanding and comparing the Company’s operating results because, by excluding gains and losses related to sales of previously depreciated operating real estate assets, impairment losses and real estate asset depreciation and amortization (which can differ across owners of similar assets in similar condition based on historical cost accounting and useful life estimates), FFO and FFO per share can help investors compare the operating performance of a company’s real estate across reporting periods and to the operating performance of other companies. The Company’s computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently.

FFO should not be considered as a substitute for net income attributable to Boston Properties, Inc. common shareholders (determined in accordance with GAAP). FFO does not represent cash generated from operating activities determined in accordance with GAAP and is not a measure of liquidity or an indicator of the Company’s ability to make cash distributions. The Company believes that to more comprehensively understand its operating performance, FFO should be considered along with its reported net income attributable to Boston Properties, Inc. and its cash flows in accordance with GAAP, as presented in its consolidated financial statements.

Future Annualized Rental Obligations

Future Annualized Rental Obligations is defined as (A) rental obligations, which are the sum of (1) contractual base rents at lease expiration (excluding percentage rent) plus (2) budgeted reimbursements from tenants at the end of the current reporting period, multiplied by (B) twelve. These annualized amounts exclude rent abatements.

In-Service Properties

The Company treats a property as being “in-service” upon the earlier of (i) lease-up and completion of tenant improvements or (ii) one year after cessation of major construction activity under GAAP. The determination as to when a property should be treated as “in-service” involves a degree of judgment and is made by management based on the relevant facts and circumstances of the particular property. For portfolio operating and occupancy statistics the Company specifies a single date for treating a property as “in-service,” which is generally later than the date the property is partially placed in-service for GAAP. Under GAAP a property may be placed in-service in stages as construction is completed and the property is held available for occupancy. In accordance with GAAP, when a portion of a property has been substantially completed and occupied or held available for occupancy, the Company ceases capitalization on that portion, though it may not treat the property as being “in-service,” and continue to capitalize only those costs associated with the portion still under construction. In-service properties include properties held by the Company’s unconsolidated joint ventures. In-service Office properties exclude hotel and residential properties.

Market Rents

Market Rents used by the Company in calculating Average Economic Occupancy are based on the current market rates set by the managers of the Company’s residential properties based on their experience in renting their residential property’s units and publicly available market data. Trends in market rents for a region as reported by others could vary. Market Rents for a period are based on the average Market Rents during that period and do not reflect any impact for cash concessions.

Same Properties

In the Company’s analysis of NOI, particularly to make comparisons of NOI between periods meaningful, it is important to provide information for properties that were in-service and owned by the Company throughout each period presented. The Company refers to properties acquired or placed in-service prior to the beginning of the earliest period presented and owned by the Company through the end of the latest period presented as “Same Properties.” “Same Properties” therefore exclude properties placed in-service, acquired, repositioned, or in development or redevelopment after the beginning of the earliest period presented or disposed of prior to the end of the latest period presented. Accordingly, it takes at least one year and one quarter after a property is acquired or treated as “in-service” for that property to be included in “Same Properties.” Pages 22-24 indicate by footnote the “In-Service Properties” which are not included in “Same Properties.”

EX-99.2

Exhibit 99.2

LOGO

800 Boylston Street

Boston, MA 02199

AT THE COMPANY

Michael LaBelle

Executive Vice President,

Chief Financial Officer and Treasurer

(617) 236-3352

Arista Joyner

Investor Relations Manager

(617) 236-3343

BOSTON PROPERTIES ANNOUNCES

SECOND QUARTER 2016 RESULTS

BOSTON, MA, July 26, 2016 - Boston Properties, Inc. (NYSE: BXP), a real estate investment trust, reported results today for the second quarter ended June 30, 2016.

Net income available to common shareholders was $96.6 million for the quarter ended June 30, 2016, compared to $79.5 million for the quarter ended June 30, 2015. Net income available to common shareholders per share (EPS) for the quarter ended June 30, 2016 was $0.63 basic and $0.63 on a diluted basis. This compares to EPS for the quarter ended June 30, 2015 of $0.52 basic and $0.52 on a diluted basis. The weighted-average number of basic and diluted shares outstanding totaled approximately 153,662,000 and 153,860,000, respectively, for the quarter ended June 30, 2016 and 153,450,000 and 153,815,000, respectively, for the quarter ended June 30, 2015.

Funds from Operations (FFO) for the quarter ended June 30, 2016 were $220.6 million, or $1.44 per share basic and $1.43 per share diluted. This compares to FFO for the quarter ended June 30, 2015 of $208.7 million, or $1.36 per share basic and $1.36 per share diluted.

The Company’s reported FFO of $1.43 per share diluted was greater than the guidance previously provided of $1.36-$1.38 per share diluted primarily due to earlier than anticipated tenant termination income of $0.04 per share and better than expected portfolio operations of $0.02 per share.

–more–

The reported results are unaudited and there can be no assurance that these reported results will not vary from the final information for the quarter ended June 30, 2016. In the opinion of management, all adjustments considered necessary for a fair presentation of these reported results have been made.

As of June 30, 2016, the Company’s portfolio consisted of 168 properties aggregating approximately 46.5 million square feet, including eight properties under construction/redevelopment totaling approximately 3.8 million square feet. The overall percentage of leased space for the 157 properties in service (excluding the Company’s two residential properties and hotel) as of June 30, 2016 was 90.8%.

Significant events during the second quarter included:

•

On April 4, 2016, a joint venture in which the Company has a 50% interest extended the loan collateralized by its Annapolis Junction Building Seven property. At the time of the extension, the outstanding balance of the loan totaled approximately $21.5 million and was scheduled to mature on April 4, 2016. The extended loan has a total commitment amount of $22.0 million, bears interest at a variable rate equal to LIBOR plus 1.65% per annum and matures on April 4, 2017, with one, one-year extension option, subject to certain conditions. Annapolis Junction Building Seven is a Class A office property with approximately 127,000 net rentable square feet located in Annapolis, Maryland.

•

On April 11, 2016, the Company used available cash to repay the mortgage loan collateralized by its Fountain Square property located in Reston, Virginia totaling approximately $211.3 million. The mortgage loan bore interest at a fixed rate of 5.71% per annum and was scheduled to mature on October 11, 2016. There was no prepayment penalty.

•

On April 11, 2016, a joint venture in which the Company has a 50% interest received a Notice of Event of Default from the lender for the loan collateralized by its Annapolis Junction Building One property. The Event of Default relates to the loan to value ratio not being in compliance with the loan agreement. The joint venture is currently in discussions with the lender regarding the Event of Default, although there can be no assurance as to the outcome of those discussions. The loan has an outstanding balance of approximately $39.8 million, is non-recourse to the Company, bears interest at a variable rate equal to LIBOR plus 1.75% per annum and has a stated maturity date of March 31, 2018, with one, three-year extension option, subject to certain conditions. Annapolis Junction Building One is a Class A office property with approximately 118,000 net rentable square feet located in Annapolis, Maryland.

•

–more–

•

On May 27, 2016, the Company completed and fully placed in-service 601 Massachusetts Avenue, a Class A office project with approximately 479,000 net rentable square feet located in Washington, DC. The property is 90% leased.

•

On May 27, 2016, the Company completed and fully placed in-service 804 Carnegie Center, a Class A office project with approximately 130,000 net rentable square feet located in Princeton, New Jersey. The property is 100% leased.

•

On June 24, 2016, the Company completed and fully placed in-service 10 CityPoint, a Class A office project with approximately 241,000 net rentable square feet located in Waltham, Massachusetts. The property is 97% leased.

Transactions completed subsequent to June 30, 2016:

•

On July 1, 2016, the Company entered the Los Angeles market through its acquisition of a 49.8% interest in an existing joint venture that owns and operates Colorado Center located in Santa Monica, California for a gross purchase price of approximately $511.1 million, or approximately $503.6 million in cash net of credits for free rent, unfunded leasing costs and other adjustments. Colorado Center is a six-building office complex that sits on a 15-acre site and contains an aggregate of approximately 1,184,000 net rentable square feet with an underground parking garage for 3,100 vehicles. The property is 68% leased.

EPS and FFO per Share Guidance:

The Company’s guidance for the third quarter and full year 2016 for EPS (diluted) and FFO per share (diluted) is set forth and reconciled below. Except as described below, the estimates reflect management’s view of current and future market conditions, including assumptions with respect to rental rates, occupancy levels and the earnings impact of the events referenced in this release and otherwise referenced during the conference call referred to below. The estimates do not include possible future gains or losses or the impact on operating results from other possible future property acquisitions or dispositions, other possible capital markets activity or possible future impairment charges. EPS estimates may be subject to fluctuations as a result of several factors, including changes in the recognition of depreciation and amortization expense and any gains or losses associated with disposition activity. The Company is not able to assess at this time the potential impact of these factors on projected EPS. By definition, FFO does not include real estate-related depreciation and amortization, impairment losses or gains or losses associated with disposition activities. There can be no assurance that the Company’s actual results will not differ materially from the estimates set forth below.

As shown below, the Company has updated its projected EPS (diluted) for the full year 2016 to $3.04 - $3.11 per share from $3.00 - $3.10 per share. This is an increase of approximately $0.03 per share at the mid-point of the Company’s guidance consisting of $0.02 per share due to the acquisition of a 49.8% interest in the joint venture that owns Colorado Center (net of $0.03 per share of real estate depreciation and amortization expense) and $0.01 per share due to higher portfolio performance. In addition, the Company has updated its projected guidance for FFO per share (diluted) for the full year 2016 to $5.92 - $5.99 per share from $5.85 - $5.95 per share. This is an increase of approximately $0.06 per share at the mid-point of the Company’s guidance consisting of $0.05 per share from the acquisition of a 49.8% interest in Colorado Center and $0.01 per share due to higher portfolio performance.

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	Third Quarter 2016				Full Year 2016
	Low		High		Low		High
Projected EPS (diluted)	$	0.57	$	0.59	$	3.04	$	3.11
Add:
Projected Company Share of Real Estate Depreciation and Amortization		0.83		0.83		3.27		3.27
Less:
Projected Company Share of Gains on Sales of Real Estate		—		—		0.39		0.39

Projected FFO per Share (diluted)	$	1.40	$	1.42	$	5.92	$	5.99

–more–

Boston Properties will host a conference call on Wednesday, July 27, 2016 at 10:00 AM Eastern Time, open to the general public, to discuss the second quarter 2016 results, the 2016 projections and related assumptions, and other related matters that may be of interest to investors. The number to call for this interactive teleconference is (877) 706-4503 (Domestic) or (281) 913-8731 (International) and entering the passcode 23627785. A replay of the conference call will be available through August 12, 2016, by dialing (855) 859-2056 (Domestic) or (404) 537-3406 (International) and entering the passcode 23627785. There will also be a live audio webcast of the call which may be accessed on the Company’s website at www.bostonproperties.com in the Investor Relations section. Shortly after the call a replay of the webcast will be available in the Investor Relations section of the Company’s website and archived for up to twelve months following the call.

Additionally, a copy of Boston Properties’ second quarter 2016 “Supplemental Operating and Financial Data” and this press release are available in the Investor Relations section of the Company’s website at www.bostonproperties.com.

Boston Properties is a fully integrated, self-administered and self-managed real estate investment trust that develops, redevelops, acquires, manages, operates and owns a diverse portfolio of primarily Class A office space, five retail properties, four residential properties (including two properties under construction) and one hotel. The Company is one of the largest owners and developers of Class A office properties in the United States, concentrated in five markets - Boston, Los Angeles, New York, San Francisco and Washington, DC.

This press release contains forward-looking statements within the meaning of the Federal securities laws. You can identify these statements by our use of the words “assumes,” “believes,” “estimates,” “expects,” “guidance,” “intends,” “plans,” “projects” and similar expressions that do not relate to historical matters. You should exercise caution in interpreting and relying on forward-looking statements because they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond Boston Properties’ control and could materially affect actual results, performance or achievements. These factors include, without limitation, the Company’s ability to enter into new leases or renew leases on favorable terms, dependence on tenants’ financial condition, the uncertainties of real estate development, acquisition and disposition activity, the ability to effectively integrate acquisitions, the uncertainties of investing in new markets, the costs and availability of financing, the effectiveness of our interest rate hedging contracts, the ability of our joint venture partners to satisfy their obligations, the effects of local, national and international economic and market conditions, the effects of acquisitions, dispositions and possible impairment charges on our operating results, the impact of newly adopted accounting principles on the Company’s accounting policies and on period-to-period comparisons of financial results, regulatory changes and other risks and uncertainties detailed from time to time in the Company’s filings with the Securities and Exchange Commission. Boston Properties does not undertake a duty to update or revise any forward-looking statement, including its guidance for the third quarter and full fiscal year 2016, whether as a result of new information, future events or otherwise.

Financial tables follow.

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BOSTON PROPERTIES, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)


	June 30, 2016			December 31, 2015
	(in thousands, except for share and par value amounts)
ASSETS
Real estate, at cost	$	18,690,403		$	18,465,405
Construction in progress		865,359			763,935
Land held for future development		241,106			252,195
Less: accumulated depreciation		(4,056,716	)		(3,925,894	)

Total real estate		15,740,152			15,555,641
Cash and cash equivalents		1,180,044			723,718
Cash held in escrows		65,654			73,790
Investments in securities		21,775			20,380
Tenant and other receivables, net		84,861			97,865
Accrued rental income, net		776,816			754,883
Deferred charges, net		697,823			704,867
Prepaid expenses and other assets		144,222			185,118
Investments in unconsolidated joint ventures		252,618			235,224

Total assets	$	18,963,965		$	18,351,486

LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net	$	3,189,013		$	3,435,242
Unsecured senior notes, net		6,257,274			5,264,819
Unsecured line of credit		—			—
Mezzanine notes payable		307,797			308,482
Outside members’ notes payable		180,000			180,000
Accounts payable and accrued expenses		287,464			274,709
Dividends and distributions payable		113,071			327,320
Accrued interest payable		222,175			190,386
Other liabilities		508,952			483,601

Total liabilities		11,065,746			10,464,559

Commitments and contingencies		—			—

Equity:
Stockholders’ equity attributable to Boston Properties, Inc.:
Excess stock, $0.01 par value, 150,000,000 shares authorized, none issued or outstanding		—			—
Preferred stock, $0.01 par value, 50,000,000 shares authorized; 5.25% Series B cumulative redeemable preferred stock, $0.01 par value, liquidation preference $2,500 per share, 92,000 shares authorized, 80,000 shares issued and outstanding at June 30, 2016 and December 31, 2015		200,000			200,000
Common stock, $0.01 par value, 250,000,000 shares authorized, 153,753,830 and 153,658,866 issued and 153,674,930 and 153,579,966 outstanding at June 30, 2016 and December 31, 2015, respectively		1,537			1,536
Additional paid-in capital		6,316,191			6,305,687
Dividends in excess of earnings		(702,361	)		(780,952	)
Treasury common stock at cost, 78,900 shares at June 30, 2016 and December 31, 2015		(2,722	)		(2,722	)
Accumulated other comprehensive loss		(79,748	)		(14,114	)

Total stockholders’ equity attributable to Boston Properties, Inc.		5,732,897			5,709,435
Noncontrolling interests:
Common units of the Operating Partnership		612,385			603,092
Property partnerships		1,552,937			1,574,400

Total equity		7,898,219			7,886,927

Total liabilities and equity	$	18,963,965		$	18,351,486

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BOSTON PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Three months ended June 30,						Six months ended June 30,
	2016			2015			2016			2015
	(in thousands, except for per share amounts)
Revenue
Rental
Base rent	$	493,386		$	486,609		$	1,029,514		$	977,291
Recoveries from tenants		85,706			86,795			175,292			175,388
Parking and other		26,113			26,552			50,938			51,340

Total rental revenue		605,205			599,956			1,255,744			1,204,019
Hotel revenue		12,808			13,403			21,565			22,488
Development and management services		5,533			4,862			12,222			10,190

Total revenue		623,546			618,221			1,289,531			1,236,697

Expenses
Operating
Rental		217,938			214,464			437,110			435,814
Hotel		7,978			8,495			15,612			16,071
General and administrative		25,418			22,284			54,771			51,075
Transaction costs		913			208			938			535
Depreciation and amortization		153,175			167,844			312,623			322,067

Total expenses		405,422			413,295			821,054			825,562

Operating income		218,124			204,926			468,477			411,135
Other income (expense)
Income from unconsolidated joint ventures		2,234			3,078			4,025			17,912
Interest and other income		1,524			1,293			3,029			2,700
Gains (losses) from investments in securities		478			(24	)		737			369
Interest expense		(105,003	)		(108,534	)		(210,312	)		(217,291	)

Income before gains on sales of real estate		117,357			100,739			265,956			214,825
Gains on sales of real estate		—			—			67,623			95,084

Net income		117,357			100,739			333,579			309,909
Net income attributable to noncontrolling interests
Noncontrolling interests in property partnerships		(6,814	)		(9,264	)		(17,278	)		(24,472	)
Noncontrolling interest—redeemable preferred units of the Operating Partnership		—			(3	)		—			(6	)
Noncontrolling interest—common units of the Operating Partnership		(11,357	)		(9,394	)		(32,771	)		(29,530	)

Net income attributable to Boston Properties, Inc.		99,186			82,078			283,530			255,901
Preferred dividends		(2,589	)		(2,618	)		(5,207	)		(5,207	)

Net income attributable to Boston Properties, Inc. common shareholders	$	96,597		$	79,460		$	278,323		$	250,694

Basic earnings per common share attributable to Boston Properties, Inc. common shareholders:
Net income	$	0.63		$	0.52		$	1.81		$	1.63

Weighted average number of common shares outstanding		153,662			153,450			153,644			153,341

Diluted earnings per common share attributable to Boston Properties, Inc. common shareholders:
Net income	$	0.63		$	0.52		$	1.81		$	1.63

Weighted average number of common and common equivalent shares outstanding		153,860			153,815			153,889			153,845

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BOSTON PROPERTIES, INC.

FUNDS FROM OPERATIONS (1)

(Unaudited)


	Three months ended June 30,						Six months ended June 30,
	2016			2015			2016			2015
	(in thousands, except for per share amounts)
Net income attributable to Boston Properties, Inc. common shareholders	$	96,597		$	79,460		$	278,323		$	250,694
Add:
Preferred dividends		2,589			2,618			5,207			5,207
Noncontrolling interest - common units of the Operating Partnership		11,357			9,394			32,771			29,530
Noncontrolling interest - redeemable preferred units of the Operating Partnership		—			3			—			6
Noncontrolling interests in property partnerships		6,814			9,264			17,278			24,472
Less:
Gains on sales of real estate		—			—			67,623			95,084

Income before gains on sales of real estate		117,357			100,739			265,956			214,825
Add:
Real estate depreciation and amortization (2)		157,431			171,384			321,011			320,138
Less:
Noncontrolling interests in property partnerships’ share of funds from operations		26,183			36,699			56,202			73,214
Noncontrolling interest - redeemable preferred units of the Operating Partnership		—			3			—			6
Preferred dividends		2,589			2,618			5,207			5,207

Funds from operations (FFO) attributable to the Operating Partnership common unitholders (including Boston Properties, Inc.)		246,016			232,803			525,558			456,536
Less:
Noncontrolling interest - common units of the Operating Partnership’s share of funds from operations		25,421			24,072			54,277			47,423

Funds from operations attributable to Boston Properties, Inc. common shareholders	$	220,595		$	208,731		$	471,281		$	409,113

Boston Properties, Inc.’s percentage share of funds from operations - basic		89.67	%		89.66	%		89.67	%		89.61	%

Weighted average shares outstanding - basic		153,662			153,450			153,644			153,341

FFO per share basic	$	1.44		$	1.36		$	3.07		$	2.67

Weighted average shares outstanding - diluted		153,860			153,815			153,889			153,845

FFO per share diluted	$	1.43		$	1.36		$	3.06		$	2.66

–more–

(1)

Pursuant to the revised definition of Funds from Operations adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”), we calculate Funds from Operations, or “FFO,” by adjusting net income (loss) attributable to Boston Properties, Inc. common shareholders (computed in accordance with GAAP, including non-recurring items) for gains (or losses) from sales of properties, impairment losses on depreciable real estate consolidated on our balance sheet, impairment losses on our investments in unconsolidated joint ventures driven by a measurable decrease in the fair value of depreciable real estate held by the unconsolidated joint ventures, real estate-related depreciation and amortization, and our share of income (loss) from unconsolidated partnerships and joint ventures. FFO is a non-GAAP financial measure, but we believe the presentation of FFO, combined with the presentation of required GAAP financial measures, has improved the understanding of operating results of REITs among the investing public and has helped make comparisons of REIT operating results more meaningful. Management generally considers FFO and FFO per share to be useful measures for understanding and comparing our operating results because, by excluding gains and losses related to sales of previously depreciated operating real estate assets, impairment losses and real estate asset depreciation and amortization (which can differ across owners of similar assets in similar condition based on historical cost accounting and useful life estimates), FFO and FFO per share can help investors compare the operating performance of a company’s real estate across reporting periods and to the operating performance of other companies.

Our computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently.

FFO should not be considered as a substitute for net income attributable to Boston Properties, Inc. common shareholders (determined in accordance with GAAP). FFO does not represent cash generated from operating activities determined in accordance with GAAP, and is not a measure of liquidity or an indicator of our ability to make cash distributions. We believe that to more comprehensively understand our operating performance, FFO should be considered along with our reported net income attributable to Boston Properties, Inc. and our cash flows in accordance with GAAP, as presented in our consolidated financial statements.

(2)

Real estate depreciation and amortization consists of depreciation and amortization from the Consolidated Statements of Operations of $153,175, $167,844, $312,623 and $322,067 and our share of unconsolidated joint venture real estate depreciation and amortization of $4,618, $3,886, $9,114 and $(1,246), less corporate-related depreciation and amortization of $362, $346, $726 and $683 for the three and six months ended June 30, 2016 and 2015, respectively.

–more–

BOSTON PROPERTIES, INC.

PORTFOLIO LEASING PERCENTAGES


	% Leased by Location
	June 30, 2016			December 31, 2015
Boston		91.3	%		90.6	%
New York		90.7	%		91.5	%
San Francisco		90.5	%		93.8	%
Washington, DC		90.3	%		91.0	%

Total Portfolio		90.8	%		91.4	%

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